Visscher v The Honourable President Justice Giudice & Ors
[2009] HCATrans 106
[2009] HCATrans 106
IN THE HIGH COURT OF AUSTRALIA
Office of the Registry
Sydney No S30 of 2008
B e t w e e n -
TIMOTHY VISSCHER
Applicant
and
THE HONOURABLE PRESIDENT JUSTICE GIUDICE, THE HONOURABLE SENIOR DEPUTY PRESIDENT DRAKE, COMMISSIONER BACON, COMMISSIONER REDMOND, AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
First Respondents
TEEKAY SHIPPING (AUSTRALIA) PTY LIMITED
Second Respondent
GUMMOW J
HEYDON J
CRENNAN J
KIEFEL J
BELL J
TRANSCRIPT OF PROCEEDINGS
AT CANBERRA ON FRIDAY, 22 MAY 2009, AT 10.02 AM
Copyright in the High Court of Australia
MR J.T. GLEESON, SC: May it please the Court, I appear with MR N.J. OWENS for the applicant. (instructed by Yeldham Price O’Brien Lusk Lawyers)
MR G.J. HATCHER, SC: May it please the Court, I appear with my learned friend, MR B.K.B. CROSS, for the second respondent. (instructed by Deacons Lawyers)
GUMMOW J: There is a submitting appearance for the first respondents but some problem as to their identity, is there? You have a summons, have you?
MR GLEESON: Yes. I seek an order in terms of the summons filed on 14 May 2009, paragraph 1, as supported by the affidavit.
GUMMOW J: What is the effect of that?
MR GLEESON: To substitute Commissioner Bacon for Commissioner Roberts in the first respondent.
GUMMOW J: Is that opposed?
MR HATCHER: No, your Honour.
GUMMOW J: Very well. That order is made then. Yes, Mr Gleeson.
MR GLEESON: Your Honours, could I first identify the general question upon which we are seeking leave.
GUMMOW J: Before you do that, what relief would you be seeking, prohibition, mandamus?
MR GLEESON: Mandamus and certiorari as per page 466, which we seek to direct to the Full Bench on the understanding that that would be effective relief and it does not need to be separately directed to Commissioner Redmond effectively to have the matter heard in accordance with law if the law be as we seek to have it declared in relation to the termination question.
GUMMOW J: Heard by whom, the Commission?
MR GLEESON: The Full Bench of the Commission.
GUMMOW J: The Full Bench?
MR GLEESON: Yes.
GUMMOW J: What would be the vitality, if any, of the initial decision of the Commission on that method of proceeding?
MR GLEESON: The matter was being dealt with by the Full Bench on a re‑hearing under section 120 of the Act. If the Full Bench were directed to resume in accordance with law that re‑hearing, we would understand or submit that it would have the powers under section 120 to fully deal with the appeal. Your Honours, the relevant section is now section 120. It is in relevantly similar terms to section 45 in an earlier version of the Act.
GUMMOW J: I have reprint No 6 which goes to 1 April 2004.
MR GLEESON: In reprint No 6. It is the closest reprint for most purposes, but in terms of the appeal ‑ ‑ ‑
GUMMOW J: It would not be for this purpose.
MR GLEESON: For the appeal it is to be found in section 120. We have given your Honours’ associates a note on jurisdiction and the respondents agree with us down to paragraph 17 in identifying the jurisdictional framework.
GUMMOW J: Very well. Mr Hatcher, do you disagree with that statement down to paragraph 17?
MR HATCHER: Yes.
GUMMOW J: Yes, Mr Gleeson.
MR GLEESON: Thank you, your Honour.
GUMMOW J: We will sit until 1.00 pm.
MR GLEESON: If your Honours please. Could I identify the general question we seek to raise and then move straight to the statutory framework and the facts. The general question is whether Australian law recognises the elective as opposed to automatic theory of termination of employment contracts ‑ ‑ ‑
GUMMOW J: That is a common law question.
MR GLEESON: A common law question – particularly where the repudiatory conduct does not cause the destruction of the employment relationship.
GUMMOW J: The first question is how the common law fits or does not fit with the statutory regime, is it not?
MR GLEESON: Yes. In terms of the statutory regime, could I ask your Honours to go directly to section 170CE(1) where the jurisdictional question tendered by Mr Visscher was whether his employment had been terminated by the employer, that is the limit upon which he failed. Had he succeeded on that jurisdiction question the Commission would then have considered whether there was a ground which was harsh, unjust or unreasonable.
There are two provisions which assist in understanding termination. There is a definition of “termination or termination of employment” in the previous section, 170CD, to mean “termination of employment at the initiative of the employer” which picks up the language from the convention.
GUMMOW J: Do we not have to start at section 170CB. That tells us to whom – this is subdivision B, is it not?
MR GLEESON: Yes, it is subdivision B. Under section 170CB subsection 1 ‑ ‑ ‑
GUMMOW J: It applies to all sorts of people.
MR GLEESON: Yes, subsection (1)(c) and (d) attracted Mr Visscher on the ground that he was a federal award employee employed by a constitutional corporation and also paragraph (d). They are the two bases upon which constitutionally the legislation was founded.
GUMMOW J: Wait a minute. Do we find a definition of “Commonwealth public sector employee” somewhere?
MR GLEESON: In 170CD.
GUMMOW J: Yes. Now, I suspect that some persons falling within that description would be officeholders rather than employees in the common law sense, would be statutory officeholders, at least some of them, I suspect.
MR GLEESON: Yes, your Honour.
GUMMOW J: All I am alerting to you is you cannot jump into this legislation just with a common law set of spectacles. It applies to more than common law relationships but it uses words which have to govern both.
MR GLEESON: We accept that, your Honour.
GUMMOW J: So when it talks about employment, an employee, it is not necessarily talking about master and servant.
MR GLEESON: We also accept that, your Honour. The particular person it is catching in this case is someone who is an employee and is an award employee and we submit covered by subsection (1)(C) and (D).
GUMMOW J: Yes.
MR GLEESON: So that the two further definitions of “assistance” are termination or termination employment that I went to in section 170CD, and the second which is significant is subsection (1)(B) of that section.
GUMMOW J: Well, what is the significance of subsection (1)(B) as to demotion?
MR GLEESON: Quite significant. That section was added in 2001 by the Workplace Amendment (Termination of Employment) Act 2001 and it significantly altered the concept of termination which the Full Federal Court had dealt with in Brackenridge, one of the cases heavily relied upon here.
GUMMOW J: What I am asking you to consider, this notion of demotion does not appear necessarily linked to notions of breach of contract, does it?
MR GLEESON: No. Can I put it affirmatively, your Honour. What one gets from it is the negative is “If I am merely demoted, but not in a significant way, and I remain employed then I cannot assert I have had a termination which triggers the statutory ground”. That is the negative from it.
GUMMOW J: Suppose I am significantly demoted and it was within the contractual framework to permit that to happen, may I have been terminated nevertheless?
MR GLEESON: Yes, but I would have trouble showing it was harsh, unjust or unreasonable.
GUMMOW J: Maybe so.
MR GLEESON: Our case is the reverse, where it was a significant demotion which within the common law framework was unjustified. This is in 2004, and that in 2004 was said by Mr Visscher to be the termination which attracted 170CE. The only significance of the common law is in deciding whether that was an unlawful demotion as opposed to a lawful or justified demotion. One would need to know what his contractual rights were at that date. Our common law point is that that question was never addressed in the Commission at either level and was addressed in the Full Federal Court erroneously in law.
We fully accept that the starting point is could he point to something in 2004 which constituted acts by the employer which fell within the concept of “termination of employment”, and that would take one, in terms of Mr Visscher’s case, fairly squarely to his application to see what he identified in 2004 as being such conduct. That is found at page 4 of the book, paragraph 23.
Paragraph 23 of his application identified what he said was the termination by way of demotion. He particularised two emails and the critical documents are found commencing at page 262, where on 22 February 2004 he recorded for his employer that a requirement had been made upon him that he sail as second mate, which he asserted was a demotion from his entitlement as chief officer and unacceptable. That led to the response at 263 which took two points. The first was one of surprise because, according to the employer, there was no demotion; he had never been graded as chief officer, he was a chief mate.
HEYDON J: Second mate.
MR GLEESON: Second mate. So that he was claiming an entitlement according to the employer which he never had. The second, which went even further, was because you are employed as what is called a deck officer, originally as a third mate, any demotion in rank for any officer does not constitute constructive dismissal. In other words, the employer considers it can demote anyone, provided there is still something called a deck officer, at its pleasure.
GUMMOW J: Its phrase “constructive dismissal” that has some baggage, does it?
MR GLEESON: Well, this is a layman attempting to assert it. It certainly has baggage, whether it is picked up by his language. What he is seeking to assert, we submit, viewed in law, is that your conduct whereby you indicate I will now have to sail as a second mate as and when you direct me to and any sailing as a chief officer is at your whim and discretion is fundamentally inconsistent with the rights I have against you.
CRENNAN J: Those references to “You are currently graded Second Mate”, that refers back, does it, to – are the rankings contained in some collective bargaining agreement?
MR GLEESON: Yes, your Honour.
GUMMOW J: We had better see that.
MR GLEESON: The relevant collective bargaining agreement, which is the 2001 agreement which commenced at page 176, carried with it a document in the schedule which appeared to change from time to time. In the schedule of the date of that document, 210, he was recorded at item 36 as a third officer. We submit that that recording, when I come to that part of the case, is to be understood in the context of the clause that picks it up, clause 23, dealing with career progression.
GUMMOW J: This is item 36, is it, on page 210?
MR GLEESON: Yes. That Appendix A which at the top says “As at 15th February 2002” has to be understood in terms of its purpose under the agreement. Its purpose is indicated from pages 192 to 193, that in the context of career progression, we would submit, not demotion, an attempt is made to specify some criteria potentially inconsistent upon which the employer’s discretion to promote people might be constrained. Those criteria include merit, performance, experience, qualification, grading and service. Grading and service is referred to in clause 23.4 which takes one to a schedule. To fully answer your Honour Justice Crennan’s question, the schedule changes from time to time and the schedule which purported to record him as a second mate is at page 160.
CRENNAN J: This is the one that was operative as at 2004?
MR GLEESON: They change from time to time. Page 160 purports to record his position in July 2002 and then there are some further schedules thereafter. But it appears to be common ground that in their schedules at least they never recorded him above a second mate as at 2004. The issue arose essentially this way. I will come now, if I can, straight to what happened in 2001 which sets the background to 2004.
GUMMOW J: What happened in 2001 does not necessarily give the answer to whether he was in employment in 2004 and whether it was terminated.
MR GLEESON: If what happened in 2001, as we contend, was that the ‑ ‑ ‑
GUMMOW J: What happened in 2001 was then followed by a course of conduct on both sides and by these industrial instruments you have been taking us to.
MR GLEESON: Yes, and I have to accept them. Mr Visscher’s point in a nutshell was that in 2001 there was an anticipatory breach of his contract. He had been promoted to chief officer and he was told because of pressure from the union and a Commission recommendation, “We demote you, we rescind you”. He was entitled, at common law, to accept that and bring the contract to an end. He chose not to. He held the employer to the contract. He had a critical conversation with Captain Board.
GUMMOW J: So he held them to the contract? They did not thereafter continue to perform the contract on his terms?
MR GLEESON: In the language of Justice Dixon in Watson, he sought to hold the contact open, that is to say, “I wish to hold you to the contract I have, which is to be employed as a chief officer”.
CRENNAN J: Was he ever on any schedule as a chief mate?
MR GLEESON: I do not think we are aware of any. Can I check that, your Honour? So the employer attempts to say to the employer, you have engaged in repudiatory conduct ‑ ‑ ‑
GUMMOW J: This is in 2001?
MR GLEESON: In 2001. “I do not accept that. I wish to hold you to the contract. I wish to continue with my entitlement as a chief officer.” As Justice Dixon indicated in Watson even if a breach is repudiatory an employee may take that course. What then occurred is a critical conversation in Mr Visscher’s case, which is set out at page 433, that he had a conversation with Captain Board, the person who had signed his offer of promotion, in which he said he “did not accept interference with my promotion”. Captain Board:
assured me that I would continue to sail as Chief Officer. He said words to the effect of, “You’re doing a very good job and as far as I’m concerned, you’ll continue to sail as Chief Officer.”
Captain Board was not called before the Commission to dispute that conversation. What thereafter happened is apparent over the page 434 from paragraph 36 that at its crudest there are three aspects to an employment relationship, there may be more. One is the job you are doing. Second is what you are paid and the third is a classification or status that is accorded to it. In terms of the first and the second, for the whole of the period from September 2001 through to 2004 he sailed as a chief officer. As to the second he received the pay of a chief officer.
GUMMOW J: That is not quite accurate, is it?
MR GLEESON: In amount, which brings me to the third. In terms of classification there was a dispute. He asserted he was receiving it as of right, they said you were receiving it acting up. They are the three critical facts of the actual employment relationship in that period of close to three years. That much was appreciated by the Full Bench of the Commission, particularly page 398, paragraph [17]. As is said in the fifth line he:
performed and was paid for Chief Officer’s duties.
There was a dispute as to whether it was as of right or because he was there at the discretion of the employer acting up and being paid accordingly.
GUMMOW J: What do you say about paragraph 20 of the Full Bench’s reasons, that there are inconsistent propositions involved?
MR GLEESON: That is the essence of the Full Bench’s error of law. There is no inconsistency because one was unilateral, one was accepted. In other words, what happened in 2001, which was the attempt to demote him, which was a repudiation, was unilateral in the sense that he did not accept that and bring to an end the contract of employment as chief officer. In 2004 when the repudiatory conduct was repeated in fairly forceful terms, he accepted it.
In 2004 in the letter I took the Court to at page 262, he brought to an end the contract of employment based on the repudiation. I should complete the evidence that he did that. I took your Honours to pages 262 to 263. The two other coterminous documents from Mr Visscher are 264 on 8 March explaining that he is lodging his application for termination. It refers to a letter of 8 March which is found at page 354. The final step of course is the filing of the application.
GUMMOW J: It has to be within a certain period, does it not?
MR GLEESON: He was within the period of 21 days from the date that he – 22 February. Of course, the filing of the application was the final unequivocal evidence that he was treating the unlawful demotion as a termination. So paragraph 20 of the Full Bench fails to appreciate that the first repudiation was unilateral. The second was accepted, bringing the contract of employment to an end.
GUMMOW J: What is the significance of these conversations with Mr Bray on 8 and 9 January 2004?
MR GLEESON: Their primary significance is none for the reason that ‑ ‑ ‑
GUMMOW J: I mention it because the Full Bench emphasises it at paragraph [21] on page 399, leading up to the last three sentences in that paragraph - “ it suited” your client’s “interests to accept the demotion as effective” at 2004 “rather than at any other time in the preceding two and a half years”.
MR GLEESON: That in one sense is perfectly true because of what, as I say, Justice Dixon said in Watson. The very thing the employee is entitled to do – and perhaps I should go to that.
GUMMOW J: What they are saying, I think, to put it in contract language, is that your client snapped at the opportunity to treat it as repudiation.
MR GLEESON: Can I take them separately. In the earlier period ‑ ‑ ‑
GUMMOW J: The real question is, was the initiative that of the employer, is it not? That is what the section requires.
MR GLEESON: Exactly. In the substance of it, what the employer is saying to him in 2004, after a period of three years in which it has repudiated, pulled back – because the last thing it wanted was to terminate the relationship with this man, he was one of their best captains, they wanted him and the last thing they wanted was to be exposed to a wrongful termination suit in 2001. So had they wanted to terminate him, they ‑ ‑ ‑
GUMMOW J: The employer seems to have been caught between the union and its employee.
MR GLEESON: They were caught between the union and what they did was to engage in a prudent, minimised breach of contract for two and a half years. The larger breach of contract was the attempt to rescind. When he said “I do not accept it”, they pulled back. They accorded him work, they accorded him pay, they disputed classification and one can understand from his point of view that his common law claim in that two and a half years would have been theoretical but small in terms of money, because he was still getting his work and his money, and his attempt to bring a statutory claim in that period would have faced a real difficulty, as your Honour Justice Gummow raises, of saying, “Are you really terminated when you are in fact doing the work and you are getting paid the money?”
Now, what changes? The question is, does something significantly change in early 2004 which could have this described as a termination at the initiative of the employer? What happens is, he is told, “We make very clear to you, Mr Visscher, that you will have to sail as a second mate and at the end of this current voyage you are on, it is likely we will direct you to be sailing as second mate. Any sailing you are now doing is purely at our whim and discretion.”
CRENNAN J: Did Mr Bray contest that, which is Mr Visscher’s account?
MR GLEESON: There was a partial contest of the account, and I will show your Honours in a moment the difference between them, but there was an agreement that Mr Bray, even on his own evidence, had made a statement to the effect about a right to make him sail as a second mate. I am going to come to that evidence in one moment, but I wanted to say that the primary answer to your Honour’s question is the conversations are not what matters, because what matters is when Mr Visscher recorded what he understood to be the effect of it, namely, “I cannot sail as a right as chief officer, I have to wait and see whether, as I finish each tour, I get told I will be doing that at discretion or I will be off as a second mate”, the employer’s response was to say, “That is exactly right. Your only entitlement is as second mate. Anything else is whim and discretion.”
Now, what I wanted to mention in the statutory context was that some guidance is given from what remedies a person can obtain. The remedies are under section 170CH and under subsection (3) there can be orders for reinstatement and under subsection (4) there can be orders to maintain continuity. I want to dwell on continuity ‑ ‑ ‑
GUMMOW J: Well, (3)(a):
reappointing the employee to the position in which the employee was employed immediately before the termination –
could present a problem here, could it not?
MR GLEESON: Chief officer on our case. Subsection (3)(b):
to another position on terms and conditions no less favourable –
and that is to get to the heart of it. If Mr Visscher succeeds in this constitutional writ, he wishes the Full Bench to decide in accordance with law whether he is entitled to a remedy such as (3) or (4). Reinstatement; he seeks to be reinstated as a chief officer of Teekay, but can I mention (4) and dwell on (4). Continuity is a matter about which the Commission can make orders. A critical thing for Mr Visscher is to obtain a Commission determination that has continuity of employment as a chief officer. That is important not only if he ended up going somewhere else in terms of his record, but it is important within this company, which your Honours have seen enough evidence to indicate there is highly stratified approach to promotions, to say the least.
So when in early 2004 he gets told “Be very clear when you come off this ship, the next one could be a second mate”, what that employer is really saying is “We are really making 100 per cent clear to you, you do not have any continuity as a chief officer. You have been a second mate at best, not a chief officer”. Now, that, we submit, for a person in his position and in this statutory context, is conduct which is calculated to – likely to, reasonably foreseeable that it would lead to an employer to say “Enough is enough. I have been disputing classification with you for three years, you have made very clear you are never going to withdraw your wrongful assertion of classification. I am simply at your whim and discretion. Enough is enough, I bring to end”.
GUMMOW J: We can understand that - all the jury words, Mr Gleeson, but the question is how do you get the initiative into it?
MR GLEESON: Initiative, your Honour, initiative of the employer that the conduct represented a sufficiently fundamental derogation from his entitlement at contract and was calculated to have a sufficiently deleterious effect where continuity was critical.
GUMMOW J: Calculated you mean in the ordinary course of reasonably expected events.
MR GLEESON: Yes, such that an employee could reasonably say “I now regard this as a termination” and it is certainly a significant reduction in both duties and pay if he is to be there only as a second mate. Can I just show your Honours the evidence ‑ ‑ ‑
GUMMOW J: The initiative does not have to be calculated to bring about an end to the employment, does it?
MR GLEESON: No.
GUMMOW J: Is that not a question, whether it does need to be of that nature because the evidence does suggest that the employer wished to retain the services of your client if possible because he was a very skilled officer.
MR GLEESON: He was a skilled officer, there was no doubt and they wanted him, but they did not want to accord him the capacity to which he had his entitlement. That is the central point. Is a person of this superiority who has done the right thing in the sense that he has mitigated his loss by staying there, doing the work, getting the pay and disputing classification, was he in those circumstances of early 2004 entitled to say “This is now intolerable because what I now know is that in this stratified company I am sitting there as the second mate at best somewhere down the list, having to wait until 10 people above me in the list might be considered before I actually get back to where I say I was in 2001”. That is close to three years in a man’s life and we submit that it is not only a repetition of the 2001 conduct but it is repetition which in its timing and effect was calculated to lead to that result.
CRENNAN J: In early 2004 was the company still willing for him to act up as chief mate and be paid as chief mate – even though Mr Bray was saying you might in some circumstances be compelled to sail as second mate?
MR GLEESON: The company’s position was, “We want to make very clear it is completely at our discretion and if we send you on the next ship as second mate ‑ ‑ ‑
GUMMOW J: Is there a finding about that, because it may be important.
MR GLEESON: As your Honour Justice Gummow noted, the Full Bench dealt with it at paragraph [11] of page 397 on the basis that it would accept the correctness of ‑ ‑ ‑
GUMMOW J: They preferred Mr Bray did they not, surely?
MR GLEESON: No, at paragraph 11 they accepted, by way of assumption, the correctness of Mr Visscher’s evidence of the conversation. Mr Visscher’s evidence is set out at paragraph [8] which included:
we’ll sail you as Second Mate, probably on a products tanker.” I did not concur.
Then he was asked to join the Broadwater as a CO, but for a single tour of duty. So made very clear that this acting up is for a single tour of duty.
CRENNAN J: Tour of duty.
MR GLEESON: So he would get paid up for that tour but otherwise completely at their whim and discretion. Then we see Mr Bray’s version at paragraph [9] where he acknowledges in paragraph 5 that the request was:
to join the Broadwater as Acting Chief Officer . . .
“How long will that be for?”
Bray:
“For the balance of this swing, and then we will look to see how things pan out after that”.
So even on that version, “You have got one more in an acting position and after that we have a complete discretion as to what we will do to you” –
“If I don’t stay there as Chief Officer, what will happen to me then . . .
“If all the Chief Officers are available, you would sail as Second Mate”
So that is a fairly clear version, even on Mr Bray, that on a fairly likely assumption, not an unreasonable one, not a fanciful one, he will be sailing as second mate and therefore – which makes the critical difference – he will, for the first time in the three years, be actually doing a duty less than his duty, his pay will be less and one would think that would be destructive of his continuity because he is then actually doing the lesser work.
CRENNAN J: You have paragraph 8, of course, as well of Mr Bray.
MR GLEESON: Paragraph 8 is where the dispute came in, but the dispute seems to be, “I did not tell him ‘he would be required’, but what I did tell him was”, as per 7, that in an event ‑ ‑ ‑
GUMMOW J: He might possibly be at some future time?
MR GLEESON: “You will actually sail as second mate if the others are available”, that was the way it was put.
CRENNAN J: If there were no chief officer vacancies, that is really the position, is it not, putting it all together 8 as well as 7?
MR GLEESON: On his version and then that part where there is a difference between them is what was then disputed by Mr Visscher. I can give your Honours that ‑ ‑ ‑
GUMMOW J: What do we do about these disputed matters on a prohibition application?
MR GLEESON: On a prohibition application we submit your Honours should approach it on a no less favourable basis than the Full Bench approached which was a preparedness to assume Mr Visscher was correct. The reason the error came in, the jurisdictional error, is that because the Commission made the Watson error and assumed that he had been effectively in law stripped of his chief officer position, it did not become necessary to resolve any of these questions further and so the jurisdictional error has resulted in this approach taken.
GUMMOW J: These paragraphs in this conversation, they do not touch the question of remuneration, do they? They are all about status. They are not talking about remuneration.
MR GLEESON: I believe your Honour is correct that the employer did not say in terms “You will sail as second mate and be paid as second mate”, but that is the critical difference, that he had always sailed as chief officer for the intervening two and a half years. So this is the first time the situation is raised, “You are actually sailing in a lower position”. Can I give your Honours just the reference to ‑ ‑ ‑
GUMMOW J: This phrase “actually sailing”, what does that mean? It means something in practical reality, does it not?
MR GLEESON: Yes, in practical reality. Could I just show your Honours the difference between the two positions? At page 254 one has Teekay’s explanation.
GUMMOW J: We are talking about a chain of command.
MR GLEESON: Yes, in a chain of command. We have at 254 to 255 conveniently summarised; the chief officer is second in charge of the ship on the deck and has very great responsibilities subject only to the master. The second officer has a more limited and confined set of tasks and the third officer even more so. That difference was illuminated by Mr Visscher at pages 239 to 240. At page 239 he explained at paragraph 29 the second mate’s role.
GUMMOW J: We do not see the second mate in that list at page 254, do we?
MR GLEESON: Second mate is second officer – responsible for bridge navigational equipment, passage planning, medical supplies and radio equipment. That equates to paragraph 29. Then the chief officer, at paragraph 30, as second in command “keeps the 4 to 8 navigation watches” and is responsible for what one would have to accept to be an important and extensive range of activities. So the employer for the first time, the two‑and‑a‑half years, is saying “If the chief officers are available, you will be the second mate”.
KIEFEL J: To what extent do you say this Court has to consider the dispute of facts at this time?
MR GLEESON: We submit the Court does not need to.
KIEFEL J: Do we have to consider it in relation to utility of the order?
MR GLEESON: Other than to accept that there is sufficient utility in the sense that if we are correct in the legal point and he had a right to be chief officer, to be told on his version of events what he claims with the consequences that would flow from that, there is a sound basis to think that the Full Bench properly carrying out their rehearing function would regard that as termination at the initiative of the employer.
GUMMOW J: But termination may include demotion. That is what one gets out of section 170CD(1B).
MR GLEESON: Yes. As I commenced, the reduction in responsibility between chief officer and second officer or third officer would be significant, not insignificant. If it occurs within the context of a continuing employment relationship, the ‑ ‑ ‑
GUMMOW J: At least you have to say in duties, because the remuneration position does not seem to be clear on the evidence.
MR GLEESON: At least duties and we would seek to infer remuneration.
GUMMOW J: Then you ask yourself on your case was that demotion at the initiative of the employer. That would be enough for you, would it?
MR GLEESON: Yes, your Honour.
GUMMOW J: Without worrying about the Automatic Fire Sprinklers Case.
MR GLEESON: Yes. Your Honour, I am not seeking to bury myself in the common law or equity more than I need to. I accept fully that the starting point is the statute. We seek to place a lot of reliance on the implication of section 170CB.
GUMMOW J: Was that considered by the Full Bench – the matters you have just been putting to us as to section 170CD and (1B)?
MR GLEESON: I believe not, your Honour, for this reason, that the critical case that the Full Bench relied upon – Brackenridge 142 ALR 99 – which I now want to come to, which we not only distinguish but was a case decided on the former legislation which did not have that provision in there.
GUMMOW J: This is a pre‑(1B) case, is it not?
MR GLEESON: Yes. The case held two things. There was no termination of employment – this is page 101 at the bottom to 102. In circumstances where the worker misbehaved, the employer was entitled at common law to demote the worker from canteen supervisor to canteen assistant and the worker proceeded to work at the lower level, although some protest and the Court found significant the convention ‑ ‑ ‑
GUMMOW J: Subsection (1B) to some extent reflects these notions of constructive dismissal that the ILO has agitated about, does it not?
MR GLEESON: Yes, it was. In effect it has reversed the Brackenridge situation because Brackenridge says if you demote the person but an employment relationship continues, that will never be termination of employment within the Act. That has been reversed by Brackenridge. That is the first critical change. The second is, your Honours see at the foot of 102 to 103 that the objects of this Division were then in a very different form. The objects were to give effect to the Termination of Employment Convention. Those narrow objects or precise objects have been replaced by the current objects which are freed of the convention. That occurred in 1996.
GUMMOW J: We still have subsection (2), do we not, of the definition provision in 170CD?
MR GLEESON: Yes. That is now the linkage back to the convention.
GUMMOW J: That does not pick up subdivision B any more?
MR GLEESON: No.
GUMMOW J: And we are in subdivision B?
MR GLEESON: Yes, that is right. It was Act No 60 of 1996, the Workplace Relations and Other Legislation Amendment Act, which changed the objects, removed the Brackenridge objects and replaced the current more generalised objects. So when the Full Court dealt with Brackenridge at pages 439 to 441 and regarded it as highly ‑ ‑ ‑
GUMMOW J: Is your complaint that the Full Bench in this case paid too much exclusive attention to Brackenridge?
MR GLEESON: Yes. A case which was decided on different legislation in the two respects I have mentioned and, secondly, was factually the reverse situation because Brackenridge was one where the demotion was a lawful demotion at common law because it was a response to misconduct by the employee and the demotion resulted in the employee actually working at the lower level. They are the two critical factual differences from what occurred here in 2001. So in terms of the Full Court’s reasoning, if I could perhaps go to that now.
GUMMOW J: This notion of constructive dismissal and disguised dismissal that the ILO was concerned with, that could operate, could it not, even if there was no contractual breach in the imposed demotion, could it not?
MR GLEESON: Yes, it could, your Honour. Your Honours, with 429 and following of Justice Buchanan, we accept the analysis in paragraphs 15 to 19 is correct, which sets up the jurisdictional question. We submit paragraph 19 is correct, that the Commissioner’s conclusion did involve a finding about a jurisdictional fact which was examinable in the present proceedings.
MR GLEESON: While Justice Buchanan said he would not give specific attention to the jurisdictional question at the Full Bench level, we submit that ‑ ‑ ‑
GUMMOW J: Well, the Full Bench refused leave, did they not?
MR GLEESON: They refused leave on the basis of, we submit, the identical error which went to the jurisdictional fact of the Commissioner and therefore ‑ ‑ ‑
GUMMOW J: Is the effect of the relief you seek here that they reconsider the question of whether they should grant leave?
MR GLEESON: Yes. In any event we submit that although the jurisdictional error is slightly different when one looks at the Full Bench as opposed to the Commissioner, it is in substance the same error that has driven both and therefore it is ‑ ‑ ‑
CRENNAN J: In the original application - if I am remembering it correctly - which was remitted to the Federal Court, you sought to quash the original decision as well as the decision of the Full Bench.
MR GLEESON: Yes. Some of your Honours’ questions this morning have caused me to pause and consider that if our point otherwise has merit, we ought to be seeking leave to amend page 466 to include an appropriate order against the Commissioner, and perhaps just directly seek an order that the Commissioner hear and determine the matter in accordance with law and exercise the jurisdiction.
GUMMOW J: You had better show it to your opponent, or hand up a revised proposal after lunch.
MR GLEESON: Yes. So then, just completing Justice Buchanan, after recording the facts the two - I would wish just to emphasise paragraph 38 to complete the evidence of the termination at the initiative, because paragraph 38 on page 434 simply illustrates on the termination of the initiative point that after Mr Visscher filed his proceedings he quite properly tried to mitigate his loss and also engage in some discussion with the employer as to whether he could get his position reinstated, and the company’s position in the letter of 5 April made its matter very clear that his permanent grading was unequivocally as second mate, and that is what his continuity would be.
He would be acting up during a period of current shortage, the length of which could not be determined. The company reserved the right to appoint him - that is at any time – as second mate, and he had to be considered for permanent appointment to chief mate as per the EBA. If he had a right to be the chief mate already, they were four fairly equivocal denunciations of his right, and viewing it simply within the statutory language of termination at the initiative; that is conduct in paragraph 38 calculated to lead to what Mr Visscher did at 39.
The critical errors in Justice Buchanan’s judgment are found at paragraphs 49 and 54. In paragraph 49 Justice Buchanan reads Watson as meaning that:
Mr Visscher could not insist on performance of his contract –
this is post 2001 –
by Teekay even if the contract itself remained on foot for limited purposes.
The error, with respect, that his Honour is making is using limitations upon remedy, in equity, are destroying common law rights. The fact that he may not have been able to get specific performance of the contract - a contract which his Honour acknowledges remains on foot - has through this reasoning, actually altered the terms of the common law contract. His common law contract has gone from being “I am employed as a permanent chief officer” to “I am employed at some lower status”.
GUMMOW J: When you say “employed as a chief officer”, there has to be a power of direction by the employer as to on what voyages surely. Where do we find that? What particular tours of duty? It is not like turning up to a factory everyday.
MR GLEESON: No, and the evidence in various places refers to without, I do not think, gathering in one spot each of the directions that was given to him, but a series of directions were given.
CRENNAN J: I think for the two and a half years he was on the one ship, was he not?
MR GLEESON: Your Honour is correct, the Samar Spirit, so on that one ship on various tours of duty.
GUMMOW J: Then there was a change of vessel.
MR GLEESON: Yes. So, your Honours, the point I was seeking to elucidate from 49 is that Justice Buchanan has reasoned if you cannot get specific performance in equity by reason of it being a contract of personal service, what that has caused is for your contract, which is a common law creature, to change in terms so that you are now employed at the lower level. That error, we submit, is important and it is one that, if it were correct, produces the extraordinary result that the repudiator is allowed to alter the terms of the contract to make it match the desires of the repudiator without the innocent party agreeing.
GUMMOW J: What then is the position at common law you would say?
MR GLEESON: The position at common law was ‑ ‑ ‑
GUMMOW J: No specific performance, so he goes down and they do not let him on the ship, he cannot get an injunction to compel them to let him on the ship. What does he do? He stays at home and draws his money, is that the theory?
MR GLEESON: At common law we distinguished what actually happened here, which is why he did not need specific performance, from what would happen in the more radical case your Honour mentioned. In this case he turns up on the ship and works as chief officer and gets paid and the dispute is about classification. If he turned up and reported for work and said, “I wish to be the chief officer”, and if the employer said, “No, you are not to be as chief officer, you are second mate”, under ordinary equitable principle he cannot get specific performance. Watson’s Case says ‑ ‑ ‑
GUMMOW J: What does he get? You keep talking about this employment as if it is something you can feel and touch. It is not really. It is just a legal construct.
MR GLEESON: Yes. Watson’s Case says if he does not do the actual work as chief officer, he does not get pay as chief officer and he cannot claim wages as a debt. What he does get is his claim for unliquidated damages for his loss and in that circumstance ‑ ‑ ‑
GUMMOW J: Exactly.
HEYDON J: If the contract continues and he sues ‑ ‑ ‑
MR GLEESON: He sues progressively and so the essential value for the election is, “Do I bring it to an end and bring one claim for loss of bargained damages, subject to mitigation or does my contract remain on foot and do I sue for my damages as they continue to accrue, again subject to mitigation?”. That is the law in Watson. Justice Buchanan has taken it the next step to say your contract has actually changed and you do not have a right to be chief officer even though apparently your contract is still on foot. That is the inconsistency, we submit, in that paragraph. The same problem emerges in paragraph 54.
KIEFEL J: Is it your case that the facts, properly construed, that the employer did not carry out its threat of demotion?
MR GLEESON: Yes. So, in our case, the less extreme one, it did not carry out the threat, it accorded him work and pay and wrongly disputed classification, he therefore did not need specific performance. He could not have got termination under the statute because he was still there working. His only claim would have been a claim for unliquidated damages, difficult to prove and probably not much suffered at the time, from the wrongful classification, but his contract remained on foot whereby he was the permanent chief officer.
KIEFEL J: Is that how you deal with Justice Ryan’s construct of acquiescence?
MR GLEESON: Yes.
KIEFEL J: I was going to ask you, what do you say about Justice Ryan’s view of Commissioner Redmond’s findings or lack of findings? Is he saying that Commissioner Redmond actually found acquiescence?
MR GLEESON: We do not construe it in that fashion because all Commissioner Redmond did is – if one compares two parts of Commissioner Redmond, the first at page 383, paragraph [118] to [119], he says, “I find there was no repudiation”, when one looks for the facts which underpin that, the only facts seem to be [105] to [106], which is the classification dispute.
KIEFEL J: But could the notion of acquiescence that Justice Ryan is referring to be found in [106]?
MR GLEESON: We submit not. All one gets from [106] is the classification dispute. They are recording on payslips, “We assert you are doing it as a second mate acting up”.
GUMMOW J: And also in the Full Bench at paragraph [21] on 399.
MR GLEESON: Yes. We submit the Full Bench at paragraph [17] ‑ ‑ ‑
GUMMOW J: Your client, it is said, was happy to go along with this for a couple of years until things took another turn in January 2004.
MR GLEESON: Could your Honour read [21] together with [17] on page 398 that – and I have been to it – but it is clear that since September 2001 the parties had been at odds and Mr Visscher had maintained his position and they insisted on theirs. So it was a case where each was maintaining their contrary assertion, but we submit that he did not abandon his right at any point in the period. He did not elect to bring the contract to an end, and that is the critical question which Justice Ryan, with respect, did not focus on. Could one say that at some point in that intervening period he had elected to bring the contract to an end and thereby bring into existence a new contract on the lower terms, and that is what he never did.
KIEFEL J: Do you agree with the other side of the coin in paragraph [17], that is, that the employer had maintained its position with respect to its right to effectively demote him? I am just trying to work out what your position really is because you have said before your take on the facts is that it did not carry out its threat. I am just trying to work out whether you are saying the employer says one thing but does another.
MR GLEESON: All the employer did in that intervening period after Captain Board said, “I want you as chief officer”, is, in effect, direct him to work as a chief officer on the vessel, which he did, that was his ‑ ‑ ‑
GUMMOW J: And paid him accordingly.
MR GLEESON: Sorry?
GUMMOW J: And paid him in substance, I think, accordingly.
MR GLEESON: Paid him in substance that amount, but on the payslips and on the grading slips, on our case, assert a right that it did not have in law, implicitly assert that right by way of its classification. So in that intervening period, what would need to be there in Justice Ryan’s approach would be to say, was that wrongful classification in that period of itself at common law repudiatory or was it within the statutory language something which could produce a termination at the employer’s initiative and if it did, did he do something in that period to say, “I bring my relationship with you to an end by reason of wrongful classification and I now consent to a relationship at a lower level”. Now, on no view of the facts, we submit, could that be made out.
KIEFEL J: You are saying the two parties continued in parallel basically in this period?
MR GLEESON: Yes.
KIEFEL J: But that nevertheless the employer’s initial conduct was the repudiation, which it maintained. Is that your position?
MR GLEESON: The initial threat of the employer was actually withdrawn, because the initial threat was, “You are rescinded, you are a second mate”, which would normally carry with it, “We will be directing you to sail on tankers as a second mate”. That was what was withdrawn and Captain Broad said, “You will be there as a chief officer”.
KIEFEL J: So you say the contract continued on its proper basis?
MR GLEESON: The contract continued on its proper basis. He was fully in compliance. The employer was partially in non‑compliance by reason of wrongful classification. Wrongful classification was never going to produce much damage until it came to a head, but as the years passed on, wrongful classification becomes more serious, as I commenced with earlier on, because it eventually means you have got a huge continuity problem. Your Honour, Justice Crennan asked earlier were there any slips which correctly recorded him on our case. There is one at page 170.
BELL J: When you speak of his continuity as long as he was in fact carrying out the duties of chief officer his continuity was preserved in that capacity, notwithstanding that the payslips and the schedules recorded him at the lower rank. Is that so?
MR GLEESON: Yes.
BELL J: The award in relation to deck officers did not extend to the ship’s captain. So as chief officer you were at the top of the ranks in terms of promotion.
MR GLEESON: Yes.
BELL J: So he suffered no disadvantage by the circumstance that the company in its dealings with him in terms of the payslips was recording him at the lower rate. His continuity was preserved in practical terms?
MR GLEESON: Yes, and then his case is that by reason of the crystallisation of events in early 2004 that I have been to there now was a serious threat to that position, which he at this point was entitled to say, “I really need to know whether this is it”. When they put the position in the 5 April letter ‑ ‑ ‑
GUMMOW J: I thought you were saying that was a demotion?
MR GLEESON: Yes.
GUMMOW J: But in order for it to be a demotion it has to be demoted from something to something inferior, I suppose.
MR GLEESON: First officer to second mate. Your Honours, I am conscious of the time. The other matters that I wanted to cover were these.
GUMMOW J: No particular need to rush, it is quite a difficult case.
MR GLEESON: I have made some submissions in passing about Watson’s Case. I am not sure whether your Honours wish me to go to it in detail itself?
GUMMOW J: Yes, you could tell us all about the defence regulations in war time. That is what that case is about.
MR GLEESON: That is the part I do not wish to tell your Honour about.
GUMMOW J: Justice McHugh and I tried to explain in Byrne.
MR GLEESON: Yes, it is 72 CLR 435. The award of the arbitrator at page 440 ‑ ‑ ‑
GUMMOW J: We need to know what the regulations were first.
MR GLEESON: The regulation which is set out in the questions of law in summary on page 442, paragraph 24(1) was “reg. 14 of the National Security (Man Power) Regulations” which placed a restriction upon the termination of persons in protected employment. The letter of termination is set out in paragraph 12 on page 440 and in the second paragraph contained a clear intimation that he was terminated from his position as general manager, and in the fourth paragraph purported to keep alive a larger employment with the company in a significantly lower position.
Paragraph 14, the company was not entitled to terminate at common law and paragraph 16, Mr Watson did not accept either of the purported dismissals. Paragraph 17, each “was a wrongful repudiation”. There were then two separate grounds upon which it was alleged that the purported dismissals were ineffectual to terminate the employment and in effect Mr Watson had to succeed on only one of those two arguments to win. The relevant question of law which was posed at paragraph 24(1) was whether the purported dismissal was “ineffectual” on either ground.
Under paragraph 26 if Mr Watson won on either ground, the financial consequences were determined including a proposition that he would get salary, other remuneration and damages. Chief Justice Latham, who dissented on the regulation issue, nevertheless gave a discussion on the common law issue which has been frequently referred to thereafter. At page 450 his Honour drew the distinction between two sorts of conduct. One is where the employer actually wrongfully prevents the servant from doing the actual work he was employed to do, which is actual breach, and the second is a statement of intention, for example, that the worker would not be permitted to do the work, and that is regarded as repudiation. His Honour says in a critical passage at the end of that paragraph:
The servant need not accept a wrongful dismissal as discharging the contract. Generally, however, it would be immaterial –
So, even in the most extreme case of outright dismissal or outright walkout by a worker, we submit this is correct law, that the innocent party need not accept that as a discharge to the contract. His Honour then goes on to indicate in some cases why it would be beneficial to accept the discharge and what might follow from that. Page 452 contains the common law point that we do not dispute, that if you are prevented from actually doing the work you cannot sue for salary but, critically, at 453 at about 10 lines down it was said:
An attempt was made in this Court to argue that the arbitrator had found that he had in fact performed the work of general manager.
In other words, that, like our case, an attempt was made to argue that following the repudiatory conduct which was not accepted, the innocent party, the worker, had in fact performed the work which he said he was entitled to under the contract. In those circumstances, Chief Justice Latham would have accorded the innocent party contractual wages. Now, we submit that is the exact position Mr Visscher was in for the two and a half years. He did the work as chief officer and in law he earned the wage of a chief officer and the fact that they wrongly classified it on a payslip did not alter the true legal character of that payment. In any event, his Honour dismisses that point here because the arbitrator’s findings were not open to such a view.
GUMMOW J: Can you just look at the argument of Mr Barwick at page 444, about line 12? He submits:
There is a distinction between the relationship of master and servant and the contractual obligations that govern it. A person may employ another under a succession of contracts of employment and yet it has been held that that can be a continuous employment –
Do not those words have some resonance here as to what was happening between 2001 and 2004? Undoubtedly there was an employment. The particular contractual terms of it might be rather difficult to identify, but there was a relationship of employment, I suspect. Then you have to say that that was terminated in the statutory sense at the initiative of your opponent’s claim.
MR GLEESON: Yes, and in a purely statutory sense, where, throughout that period, the actual work is done and the pay in substance has been that to which he had a legal entitlement under a contract which he had never brought to an end, we submit that is a fact against which the statutory language of termination initiative can probably be assessed. There could have been different facts, particularly if the employer had carried out its threat more vigorously. If the employer had said “The pressure from the union is so great, the union will just not let you be as an acting chief officer ‑ ‑ ‑
GUMMOW J: Test it this way. Assume that your client committed a tort in the period of 2001 to 2004, there could still be a vicarious liability, I imagine, on the part of the employer.
MR GLEESON: Yes. We fully accept the employment relationship is continuing. We have the finding that there was repudiatory conduct at the front end and we have the findings he did not accept it and the findings that he did the work he says he was obliged to do under the contract. What is sought to be done by the Commission without close analysis and by the Full Court by legal analysis is to say the law permits only one answer to that question. That is why I commenced this morning with the elective as opposed to automatic theory of breach. The Full Bench has said the law permits only one answer. If the repudiator makes its position clear, even if you do not accept it as the innocent party, if you continue in an employment relationship it can only be on the terms of the repudiator.
GUMMOW J: Mr Barwick went on at page 444:
The objective of reg 14 is not the alteration of contractual rights between employer and employee but the imposing of a restriction upon an employer putting an employee out of his service under the particular undertaking.
That is not entirely without a resonance when you look at this legislation we are dealing with here. I am not saying it is against you.
MR GLEESON: No. Just to complete, the other passage I wish to mention, and of course it is all important, is in Sir Owen Dixon’s judgment at page 465. At the foot of the page his Honour speaks of the employee or the innocent party having a remedy of unliquidated damages for wrongful dismissal:
By keeping his contract open, he may be able to resume his service without a new contract, if his employer is induced to retract the discharge.
That, we submit, is our very case, that Mr Visscher, by keeping it open, he induced Teekay to substantially retract the threat reducing itself only to wrongful classification and thereby he could continue his service without a new contract.
GUMMOW J: That is right. Are there any Statute of Fraud points in these old cases, namely, that if a contract is to be performed for more than a certain period you had to have it in writing? You did not need it, if Sir Owen Dixon’s theory worked, at the bottom of page 465. You could rely on the older contract which was in writing
MR GLEESON: Yes.
GUMMOW J: I just wonder. I do not know the answer. I suspect that is involved in some of these old cases.
MR GLEESON: His Honour there was giving one example where there was real consequence in whether you were still employed under the old contract or whether a new contract had come into existence. That question, was Mr Visscher still employed under the old contract or had a new one come into existence, was a critical one which has not been properly looked at.
GUMMOW J: Common law theories often have a very practical reason for their development.
MR GLEESON: Yes. Could I give the Court a copy of an article, which Justices Gummow and McHugh referred to in Byrne 185 CLR 410, from the Cambridge Law Journal 1982 which discussed many of these issues. In Byrne at 454 your Honour Justice Gummow and Justice McHugh did not decide or analyse the common law issues discussed arising out of Watson, but in footnote 177 referred to this article by Mr McMullen, “A Synthesis of the Mode of Termination of Contracts of Employment”, Cambridge Law Journal vol 41 (1982) 110 as a discussion of what was described as the elective or the automatic theories of termination of contracts of employment. We submit that the article in its whole is a very useful discussion of how the English cases had grappled with the problem.
GUMMOW J: Is this before Ferodo?
MR GLEESON: It is before Ferodo. Essentially, Ferodo has taken up one of the points of this author, namely, that certainly in a case where the repudiatory conduct does not sever the employment relationship there is no automatic termination. The author in fact, when dealing with the automatic theory, in the middle of page 112, made the point that its first emergence in employment contracts was only in cases of wrongful dismissal, that is, in cases where there was an outright severance of the employment relationship.
He then noted at 113 that some cases, particularly in statutory contexts in England where the scope of the termination remedy was narrow, ironically extended the automatic theory into lesser repudiatory breaches in order to expand the jurisdiction of the court and that statutory background is dealt with under the heading, “Pragmatic Considerations” on page 114. Commencing from about 118, the authors argues that the automatic theory is discredited by a line of cases, and the cases he refers to are in large part those which the House of Lords then followed in Ferodo.
Interestingly on page 120 the author does refer to Watson and, we submit, reads Chief Justice Latham’s comments correctly as evidence in Australia that even in the more extreme case of outright dismissal, the automatic theory should not be adopted. The author then, from about page 123, deals with certain consequences of the elective theory being the correct theory, and from about page 126 deals with the point I have sought to make which is that the limitations upon equitable remedies ought not be translated into a destruction of common law rights.
GUMMOW J: The problem is, I think, identifying what the common law rights are.
MR GLEESON: Yes.
GUMMOW J: In a practical sense.
MR GLEESON: What are they in a practical sense. Can they survive and remain ‑ ‑ ‑
GUMMOW J: On this hypothesis of survival.
MR GLEESON: Yes, and did they, did they, and that ultimate question which was at the centre, we submit, of the jurisdiction is what the Commission never squarely grappled with. If I could just refer to page 132, the author gives an example where it might be beneficial to the worker to keep the contract alive, notwithstanding a fairly fundamental breach, and the example is in continuity of employment, one of the matters I have tried to highlight, that there can be importance to the worker ‑ ‑ ‑
GUMMOW J: Where do we see this, in 132?
MR GLEESON: In 132 under section (d), that if you keep your contract alive you may for statutory purposes be able to avail yourself of additional remedies which are contingent upon having been employed for a longer period.
GUMMOW J: Well, that is a statutory benefit, as it were.
MR GLEESON: A statutory benefit flowing from the common law and in our case we submit that ‑ ‑ ‑
HEYDON J: Also the top of page 132.
MR GLEESON: Yes.
HEYDON J: Many examples “need to accrue constructive service for full pension entitlement” or “occupation of property under a service occupancy”.
MR GLEESON: Yes, and the very practical benefit to Mr Visscher if he is correct is he is able to obtain an order for continuity under the section I referred to on the basis of an existing contract which has remained in force and which was wrongly terminated by the employer.
Your Honours, that brings me to the House of Lords in Rigby v Ferodo. The only report we have is [1998] ICR 29. That was a case where, like the present, the employer wanted to keep the employees on. They continued to do their work, the employer wrongly reduced their pay. The argument was put based on the automatic termination theory that the breach – or the repudiation meant that the contract came to an end, notwithstanding the worker had not accepted it. At the bottom of page 32, letter H ‑ ‑ ‑
GUMMOW J: What was the statutory framework for this? Was there one, or was it purely a common law case?
MR GLEESON: I believe it was entirely common law, save that there was a background where 12 weeks notice was required to terminate he contract of employment which may have had a statutory basis. What is seen at the bottom of page 32 is that the employer did not go through that route of giving the 12 weeks notice at termination, it simply kept them on but paid them less. The automatic termination argument was then advanced on pages 33 to 34.
GUMMOW J: No reference to the Sprinklers Case unfortunately. Yes.
MR GLEESON: One can see from page 34 at letter E that leave had been granted to appeal to the House to deal perhaps with the larger question, does the automatic theory of termination apply where there has been a total severance of the employment relationship. That, on analysis, was not this case because the employment relationship had continued and so the House dealt with it on the narrower question which we submit is the very one we have. They clearly distinguish between letters F and G, their Lordships, that whatever may be the case if there is an absolute walkout or refusal, there is:
no principle of law that any breach which the innocent party is entitled to treat as repudiatory . . . brings the contract to an end automatically.
One then sees how the argument was sought to be put that where you had a combination of three factors the contract was automatically brought to an end, the argument was analysed and rejected. The focus at letters C to E on page 35 at a factual level seems to be did the repudiator seek to force upon the other party some new contractual term and then did the other party reject that term or did they accept it.
That, we submit is a useful test here. In the two‑and‑a‑half year period did the employer seek to force upon Mr Visscher some new contractual term, or different contractual term? If so, did he accept or reject it. We submit, coming back to the acquiescence that there is nothing he did by way of acceptance of a different contract and it would be very difficult to find any point in the two‑and‑a‑half year period where the old contract is said to have ended. That is dealt with also between letters E to G where the waiver‑type argument is rejected. Your Honours, the only matter I have not dealt with so far is the 2001 certified agreement which was Justice Buchanan’s second short ‑ ‑ ‑
GUMMOW J: Does anything come from the interim award of 1998?
MR GLEESON: Only this, that award is part of his ‑ ‑ ‑
GUMMOW J: Part of his contract.
MR GLEESON: ‑ ‑ ‑ contract of employment and what it does is to set up provisions for termination in clause 11.
GUMMOW J: That is what I wondered.
MR GLEESON: And they are provisions which, in a fairly conventional manner, provided him with the assurance that if he was to be terminated, he would either be given a requisite period of notice or pay. This, we submit, does provide some analogy with the facts of Ferodo in that the very thing that Teekay did not want to do was to lose Mr Visscher and the very thing they did not want to do in that intervening two and a half years was to terminate him. They certainly never gave him notice, they never offered him pay and they were studious to avoid being called a terminator in that period.
GUMMOW J: They wanted him to accept the position that he might have to sail in a lesser rank.
MR GLEESON: Yes. So that we only invoke it as further evidence that any suggestion that he had brought to an end his old contract and agreed to a new one does not sit very squarely with the employer who had never given him the requisite notice or pay and which he had never accepted. If they wanted to carry through their rescission in the face of his rejection of it, there was an option open to the employer; terminate him, give him pay or notice. They would have faced the consequences of a statutory action at that point rather squarely because it may well have been a harsh and unjust termination, but do it and then say, “Would you now like a job as third mate or second mate?” Had they done that and he accepted it the position would have been clear. So their failure to go through that route is a matter we rely upon and, your Honours, it does conveniently lead me to the last point, which is ‑ ‑ ‑
GUMMOW J: Just before you do that, is there any spot where we can find an identification that this is part of his contract, the award is part of it?
MR GLEESON: Yes. His contract consists of these documents read together. Firstly, pages 260 to 261 is the actual acceptance of chief officer. That is to be read against his earlier contract which is at pages 249 to 253. Page 249 expressly incorporates in clause 2 two matters. Firstly, the 1998 agreement which is found at page 113 and following and, secondly, this award.
HEYDON J: The award refers to the respondent as an employer to whom the award applies, clause 4.1? The award applies to the employers named as respondents. That is Teekay Shipping Australia Proprietary Limited and persons engaged or employed by an employer respondent in the capacity of mate?
MR GLEESON: Yes.
GUMMOW J: Thank you.
MR GLEESON: Your Honours, the final matter was that Justice Buchanan had a short alternative ground perhaps best viewed as a discretionary ground because it was not dealt with at the Commission level. It is found at pages 441 to 442.
His Honour’s reasoning is that the 2001 certified agreement imposed what are described as inconsistent obligations with the position under his contract of employment so that if he was employed as chief officer the moment this agreement came into effect his contract was – and this is where the argument gets difficult – frustrated, Teekay said on special leave – was statutorily varied – another possibility, was statutorily terminated with a new contract coming into existence at the lower level.
Our first complaint about these two paragraphs is that there has been no analysis with precision of whether the 2001 agreement could sit together with his existing common law rights and the finding of inconsistency ought not to have been made without a proper analysis of whether the documents could sit together.
Our second complaint is that this is an argument quite foreign to the normal beneficial operation of an award or a collective agreement. Normally, they provide a baseline of terms and conditions which can be shared in by all employees, but which individual employees may obtain additional rights to under their contract. What is actually contemplated here – and we are not aware of an authority from our searches which has applied it – is that a collective agreement can destroy the rights of an individual. That, we submit, would raise a very real set of questions about the ambit of the statute to authorise an agreement which destroys individual rights, and of course questions of construction of the individual agreement. None of that has been engaged in.
GUMMOW J: It could raise 51(xxxi) questions, could it not?
MR GLEESON: Had it been a real matter, your Honours, it could well raise a 51(xxxi) question. I should go to the legislation, but the relevant part that gives force to these agreements is Part VIB, Division 2. I will start with Division 1, but the critical division is going to be Division 2. Section 170L contains an object which may not be of decisive help, and 170LA(1) contains a duty on the Commission to further the objects of the Act and of the Part. There is an important definition in 170LE of a “valid majority”. A valid majority of the employees:
(a) make or genuinely make the agreement; or
(b) approve or genuinely approve:
(i)the agreement . . .
if -
and then there are requirements of a “reasonable opportunity” to be accorded by the employer to the employees as to whether they want to make it, and then there has to be a majority vote which decides, or genuinely decides, they want to make the agreement. It immediately brings to mind analogies in other areas such as where statutes permit the majority to bind the minority, a scheme of arrangement under section 411 of the Companies Act, the power to amend articles of association dealt with by this Court in Gambotto.
The concept apparently is that there is a subject matter where the class of persons have a sufficient community of interest to be able to genuinely meet, debate, and come to a decision under which the majority binds. That is taken a little further when we come to Division 2. Under section 170LH the statutory underpinning of this division appears to be section 51(xx), constitutional corporation, and the types of agreements under LI are agreements about matters ‑ ‑ ‑
GUMMOW J: Or section 61 of the Constitution - Commonwealth employees.
MR GLEESON: Yes, as well. The distinction I seek to draw is when we come to Division 3 - which is not our case - commencing at 170LN, that seeks to invoke the arbitration power. It is about agreements which can properly be understood as settling disputes and there is a stray hint in the respondent’s submissions that this certified agreement was about settling a dispute. It was not a Division 3 agreement, it was Division 2. This is intended to be an agreement which under 170LI is capable of dealing with matters which pertain to a relationship which is said to exist between a “constitutional corporation” employer and all persons in a business.
Now, that immediately, we would submit, suggests that the subject matter about which the employees are to meet and debate is one that will be laying down matters which can properly pertain to a relationship which can be established between the employer and all of them. The subject matter is not, can the majority meet and vote to extinguish the contractual rights of one worker. That would be expropriation and it would not be a proper purpose for the exercise of the power.
Now, your Honours, we consider that probably, were it read otherwise, there would be a section 51(xxxi) argument because the corporations power would not be a source of power for agreements whereby the corporation can extinguish and thereby acquire, in effect, the contractual rights of one worker without just compensation. However, the better reading is probably that, once one has regard to the purpose of these provisions and to the manner in which the valid majority must meet and vote, the necessary just terms, as it were, are to be found in the limitations on the proper scope of the power.
Then your Honours see in 170LJ the requirements, including subsection (2) the valid major, subsection (3) adequate notice. Section 170LJ deals with an agreement between the employer and the union, in effect. Section 170LK deals with an agreement between the employer and employees. There are similar notification provisions in 170LK. The effect of an agreement arises through certification under 170LT. Again there are some indications of its intent to be broad ranging and non‑expropriatory.
Under subsection (2) it must pass the no disadvantage test. That is set out in section 170XA. In short, one conducts an overall balance by comparison with rights available under awards or laws. That is hardly something that could be done if one is expropriating an individual’s rights. Finally, 170LT, returning to that, subsections (5) and (7) are important.
Finally, this provision has penal consequences, section 178. If Mr Visscher breaches a term of the certified agreement he is subject to a penalty. Now, again unlikely that it is the proper purpose of a certified agreement to destroy someone’s current contractual duties and obligations.
GUMMOW J: What is this criminal provision?
MR GLEESON: Section 178(1). Unlikely that if Mr Visscher turns up for work the day after the agreement and says, “I wish to work as chief officer”, he has subjected himself to a penalty. So that is the statutory background.
HEYDON J: This is all an argument to construe the agreement in a certain way.
MR GLEESON: Yes.
HEYDON J: It is not to invalidate it?
MR GLEESON: No. Then when one comes to the particular agreement, which commences at page 176 – could I hand up the certification page which needs to be attached to page 176 to confirm it is an agreement under 170LT. We then make these construction submissions.
GUMMOW J: Sorry, this has to be attached where?
MR GLEESON: Effectively to page 175, to commence 176. It is a Division 2 agreement. So when one comes to clause 23 on page 192, our first submission is that the subject matter of clause 23 as indicated by its headings concerns promotion or progression through the ranks from your current position, not demotion. Had the clause been intended to inflict compulsory demotion on workers simply because the majority thought it was a good thing, one would have expected very clear language; there is none.
GUMMOW J: It talks about transfers, does it not?
MR GLEESON: Transfers within the fleet. That provision, your Honour, concerns the case of a permanent transfer to a particular vessel as a result of a vacancy on that vessel.
HEYDON J: It is all a promotion anyway, is it not?
MR GLEESON: Yes. So our first point is it is about promotion not demotion and, if there be any ambiguity about it, one would expect that the clearest of language would be used if the employers were really meant to debate in a meeting, do we agree as a majority to demote Mr X? It is such an extraordinary proposition one would expect it to be in the clearest of languages and if it was, we submit, it would be beyond the power of the Act.
The second is that when one looks at 23.1.1 what it is doing is seeking to provide some constraints around which an employer would otherwise have an unfettered right to promote people on merit and it introduces a range of, inconsistent to some extent, criteria, “merit, performance, experience, qualification, grading and service”. So that the clause that is relied upon against us, clause 23.4, the grading and service rank, it must be understood as having a purpose of indicating these are the bases or the criteria by which in the future one of the relevant constraints upon the employer will be measured. Let us test that, for instance, with merit.
If your Honours go to the schedule, which is at page 210 and assume that Mr Dicker, No 12, as master resigns and assume that Teekay has the opportunity of employing as a master the most experienced and meritorious master in the southern hemisphere who comes from another employer. Is Teekay’s argument really that because of this list merit is extinguished and Teekay can never employ anyone other than someone who must start as No 51, that is, that the new master must be told, “You start bottom ranking third officer and you will have to wait until 40 people above you are promoted”. Now, that would be an extraordinary interpretation of clause 23.1.1. Rather, the better view is that it allows for the employer some field of discretion or evaluation between criteria which may be competing in practice.
The third argument is that 23.4 itself in terms is only a basis and speaks to the future which allows for something less than absolute certainty of application. The fourth argument, your Honours, comes back to the award we discussed earlier. Clause 23 should be read together with clause 24. Clause 24 are the rights on termination and in Mr Visscher’s case had Teekay wished to terminate him in mid‑2002 when this award came in, it had to go through clause 24.4.3. It had to give him notice or pay; that it never did.
Now, that serves to confirm that if what the employer is wishing to do is to terminate by demotion, its rights are constrained by clause 24 and it cannot say “I can escape that by simply replying upon 23 through the backdoor to have demoted you” because that is what the reliance on the document seeks to be. I am near the end.
The next matter, perhaps close to the final, is that although 23 point 4 speaks about an attached list, the list itself is obviously going to change over time. The list at page 210 is only a list at a date, as of 15 February. This cannot have been intended to say that is the list and the only list that is to govern over the three‑year period of the award. That can be seen, in a very practical sense, by comparing it with the list at pages 159 and 160.
Page 159 is the list immediately after the annexure A list. Some things have changed. There are now four positions being held open for first mates, not three. Mr Nelson, No 37, has been promoted about Mr Jurrjens, 38, contrary to page 210. The list is not the tablets of Moses. The list is some sort of practical instrument reflecting positions moving over time. That can be seen then of course from page 160 because Mr Visscher on 160 has become No 36. He is now a second mate. How did Mr Visscher get from being the third‑ranking third officer to the last‑ranking second mate? How did he jump Mr Jurrjens?
So the logic of the argument put against us is that somehow the document at 210, which has a different purpose fairly clearly, has operated to destroy his existing position as chief officer and in some fashion compel or invite him to work in some other position. We submit it serves no such purpose.
CRENNAN J: It is not clear to me what you say the purpose of the list is.
MR GLEESON: What it is is to set out some criteria by which ‑ ‑ ‑
GUMMOW J: It says it is a basis.
MR GLEESON: It is a basis, it is something which if one were looking at it in an administrative law sense it is something that you would have regard to when you are putting one criteria, namely lengthens in the rank together with merit, together with experience, together with qualification.
CRENNAN J: Like barristers, they are listed in terms of their seniority in position.
MR GLEESON: Yes, which can be relevant for ‑ ‑ ‑
CRENNAN J: So you can immediately tell who is the most senior first mate, second mate, third mate by reference to the date at which they started employment in that capacity.
MR GLEESON: Yes, and then that is something which this employer by the agreement is saying will be a relevant criterion in an evaluative judgment between different human beings for the ultimate purpose of sailing ships well. It is a list which changes over time for circumstances which are perfectly explicable. That is all it is. It is not there to say “If you have got an existing contractual right it is destroyed merely because I managed to get 51 per cent of the workers to an agreement which had that attached to it”. That is the issue that is raised by it.
BELL J: So 23.4 is to be understood in the context of 23.1.1. It is merely one of the ‑ ‑ ‑
MR GLEESON: That is our submission.
BELL J: Yes, I understand.
MR GLEESON: Were it otherwise, it raises quite extraordinary issues of expropriation and issues of power. As I say, this issue was never relied upon before either the Commissioner or the Full Bench.
GUMMOW J: Is it relied upon in this Court in the written submissions?
MR GLEESON: At special leave it was relied upon a little and in the current submissions it is relied upon less, we would say. It is there on the basis that we have not adequately explained why it would not be a fatal step in our argument, and I hope I have put our submissions on that. The final aspect is this. If it really were intended to use this agreement to expropriate Mr Visscher’s right, one would have expected that to have been squarely raised in the Commission and the subject of the closest of scrutiny. We do know one thing about how it was dealt with and I just need to take your Honour to one part of the book, which is page 66.
This is in Mr Visscher’s evidence. It is in his re‑examination. He was asked about this document, and his evidence to the Commissioner was he had not seen at the time the 2001 document. He was never asked to vote on it. At a minimum, if it was contended that this agreement destroyed his right, in the light of that evidence, we submit that the Commissioner was duty bound to at least inquire as to whether the requirements of the statute that I have referred to have been complied with.
If that evidence is correct, there was no valid majority; there was no notice to the workers and the agreement does not have the status it appears to have. We are not saying your Honours need to do anything more than notice that had the issue been relied upon and tendered as a basis to deny the jurisdiction of the Commission, in the face of that evidence the Commissioner would have needed to go further and look at the issue. But because it was never done we submit that Justice Buchanan erred in using it as a discretionary ground in the Full Court.
GUMMOW J: So Justice Buchanan was using it, what, on the basis that there would be constitutional writs but there would not be an exercise of discretion because of this matter?
MR GLEESON: That there would be writs because his argument was otherwise good. But this agreement as a “superior instrument” destroyed the utility of the writ. Those are our submissions. May it please the Court.
GUMMOW J: Thank you, Mr Gleeson. Yes, Mr Hatcher.
MR HATCHER: If it please the Court, can I deal with the last point first – the suggestion that the question of the agreement was never dealt with. We have our written submissions from the proceedings before the Commissioner and before the Full Bench and it was expressly dealt with there. The fact that it was dealt with is recorded in the decisions. Commissioner Redmond’s decision at page 371, paragraph [52], the Commissioner is here recounting the respondent’s case:
The issues that the applicant deliberately chose not to inform the Commission of were the events were the events immediately subsequent to his appointment to the position of Chief Officer in August 2001. Importantly, subsequent to that appointment -
That is the appointment as chief officer in August 2001 -
(a)a dispute between the respondent and The Australian Maritime Officers’ Union (AMOU) was notified to the AIRC. The dispute related to the promotion of the applicant and another employee ‑
The dispute was heard and so forth, recommendations were made. Paragraph [53]:
The result of the rescission of the appointment was that the applicant returned to a grading of Third Mate. That grading was evidenced by Appendix A to the Teekay Australia/AMOU (Deck Officers) Sea‑Going Officers Agreement 2001 (the 2001 agreement) that was certified on 5 March 2002.
[54] The applicant was subsequently promoted to Second Mate effective from 1 July 2002 and he was advised of that promotion by letter dated 5 July 2002. In light of that correspondence, it is difficult to understand the applicant’s evidence that he has “never received any official notice from Teekay that I am graded Second Mate”.
HEYDON J: I am not quite sure what this is targeted at. I thought Mr Gleeson’s point was there had not been any examination at levels below the Full Federal Court of the significance of that agreement. It is certainly mentioned in paragraph 53. In other words, is your submission meshing with his?
MR HATCHER: It is to this extent, your Honour. There has never been a suggestion previously that the agreement could be interpreted in any other way. The only issue before the Commission was the issue promoted by our client that the agreement recorded his position as deck officer grade 3 and that was his position, and he was aware of it. Mr Visscher had run his case before the Commission, at first instance, on the basis that nothing had happened in 2001. He says that expressly at appeal book 47 – application book 47 – getting rather ahead of myself. At the top of the page:
Now, I think it’s a fact, correct me if I’m wrong, in your first statement you do not refer to the events of 2001, is that the case?‑‑‑Yes.
Did you intentionally omit any reference to the events of 2001?‑‑‑I considered the events of 2001 not to be relevant to these proceedings.
It’s relevant to your claim that you have, that you now have that you were a chief officer, isn’t it?‑‑‑I’ve always claimed that I have been a chief officer. Are you saying that I’m agreeing that I’m not a chief officer?
So he deliberately omitted any reference to what had transpired before Commissioner Raffaelli to the agreement to any of that. His case was that he knew nothing of him being anything other than a chief officer until the conversation on 8 and 9 January. Now, that obviously developed once he was cross‑examined and it became clear that the respondent was going to bring to the Commission all the facts that had taken place. But his primary position was he was a chief officer, nothing had happened in 2001.
KIEFEL J: Was it shown that he was aware of the schedule to the certified agreement?
MR HATCHER: He said that he was not aware of it, Commissioner Redmond expressly found he was. He was an intelligent person, he had received it.
GUMMOW J: Where do we see that finding?
MR HATCHER: That is to be found at application book 381, yes, paragraphs [105], [106].
GUMMOW J: Yes, thank you.
MR HATCHER: Now, at the time Mr Visscher wrote to Commissioner Raffaelli, to his union and to his employer, saying, “I have been terminated in my employment”. The employer took a different view. Our client took the view that it had a right to demote or to rescind the promotion and that was either right or wrong at the time.
BELL J: But Mr Visscher never accepted in those communications to which you refer that the employer had that right.
MR HATCHER: Exactly, your Honour. He said, “I have been terminated”.
BELL J: Well, he raised a query with the company as to whether that was so.
MR HATCHER: If I could take the Court then – this is dealt with in our correction to the recitation of the facts – application book 48 and 49 at point 50:
In September 2001 you also wrote to your union, is that correct?‑‑‑Yes.
Can I show you this document. Now, that’s a letter you wrote to your union, correct?‑‑‑Yes.
As you say, you’re a member of the AMOU?‑‑‑Yes . . .
And in the third paragraph you threaten to instigate civil proceedings against the AMOU to recover any losses that might occur from their actions in relation to your promotion, correct –
and that document is in there –
You also wrote to the company about the rescission of your promotion –
and that document is in there –
And you were expressing your view to the company . . .
You didn’t take any action against the company in 2001 –
That is down towards the bottom of the page.
CRENNAN J: Are you treating the list as evidence of demotion or as part of the contractual material in relation to ‑ ‑ ‑
MR HATCHER: Evidence of an actual demotion.
CRENNAN J: Evidence of an actual demotion.
MR HATCHER: That is the basis upon which from that time the employment continued. Much has been said by our learned friends with very little reference to the materials about our client somehow resiling from its position by keeping Mr Visscher sailing as a chief officer. The evidence is from the very first day, when he was a casual he was sailing as a chief officer. He is then employed as a third officer.
GUMMOW J: You are saying then there is no demotion in 2004 to attract the operation of the Act.
MR HATCHER: Quite. No termination at the initiative of the employer, certainly.
BELL J: Prior to the discussion with Mr Bray in January 2004 the position had consistently been that he had sailed as chief mate and had been remunerated at that level.
MR HATCHER: Yes, prior to anything occurring in September 2001. From April 2001 when he started work as a casual, a casual third officer, he was sailing as first mate, being paid as third mate with higher duties up to the chief officer’s rate.
BELL J: Again, there was the correspondence in August 2001, the offer of a permanent position as first mate and the acceptance of it. Thereafter the letter expressing regret but the need to demote him on account of the union difficulty, but continuously he in fact carried out the work of a chief mate and was paid at that level.
MR HATCHER: Quite, which makes it a very fascinating case on contract law but when one comes to the question of whether there is a termination at the initiative of the employer, there is one other fact that has escaped any attention in these proceedings. Could I take the Court to application book page 238. This is Mr Visscher’s statement for evidence in the proceedings before Commissioner Redmond at first instance.
In November, 2003 I was spoken to in an unacceptable way by the Master of the Samar Spirit. As a consequence I informed Teekay that I would not rejoin the Samar Spirit after the completion of my current tour of duty. I later informed Teekay that something had occurred on the ship, and I preferred that it remain on the ship.
He then, at 24, recounts the conversation. I will read the whole conversation as he recounts it. “Amongst other things” Mr Bray said:
“You’ve asked to get off the Samar. We’d intended keeping you there as Mate [C/O]. As you’ve asked to get off we’ll sail you as Second Mate, probably on a products tanker.”
This is not Mr Bray saying, “We are now finally going to give practical effect to that demotion in 2001”. It is Mr Bray saying, “You have been sailing on the Samar since April 2001 and we had every intention of keeping you there, but if you are electing to come off we’ve got to find somewhere to put you”. This is not termination at the initiative of the employer on any view. It is simply wrong to submit, as our friends have, that Teekay was somehow holding back from giving effect to the gradings. The evidence was, and this is in Mr Parmeter’s evidence at application book 71, at point 30:
Why did Mr Visscher act for the period that he did as a chief officer?‑ ‑ ‑It’s not unusual in the shipping industry for individuals to act in a higher rank for a period of time. The nature of the industry is such that an individual may be absent for a period of duty for a variety of reasons. There may be a seamen’s compensation issue, it may be study leave, it may be long service leave, it may be any number of factors. So it’s not unusual to have vacancies in the roster and individuals in a lower rank who hold the appropriate qualification can sail at a higher rank. So that’s the general situation. In terms of Visscher’s particular circumstances, my understanding at the time – and please understand I wasn’t working for the company in 2001 – is that there were a number of individuals had retired and this had created vacancies which had to be filled. And going on from there, there was this issue of filling the vacancies which have been identified in the grading list in early 2002, and that process took a while to resolve itself, and so individuals did act up for a period of time.
Yes. And I think Mr Visscher, is he the only one acting up?‑ ‑ ‑No. My recollection is that there are at least a couple of individuals who are acting up. Mr Champion was acting up for the same period of time.
There was a need to promote. There was a problem between the company and the union about the basis for promotion. The existing union members did not have the necessary qualifications to be promoted. They wanted to be afforded the opportunity to get the sea time to enable them to get the promotion before other people were brought in. The company wanted to promote people so that it did not have a lot of people acting in a responsible position of chief officer. It tried; it failed. The Commission was faced with a dispute; product tankers taking petroleum products around the country; a petrol strike, potentially. The Commissioner made a recommendation. Our client implemented it. Mr Visscher knew exactly what our client had done. He knew what his remedies were.
KIEFEL J: Was the simple unavailability of the position of chief mate put in the Commission on behalf of the employer?
MR HATCHER: I am sorry, your Honour?
KIEFEL J: I thought you had said before that the construction you put on the facts about his request not to continue to sail on the Samar and the suggestion then that if he was put on another ship it would have to be as second mate, I thought you were implying that the position was simply that there was no position available as chief officer and that the employer could not seen to be terminating. Have I misunderstood what you are putting?
MR HATCHER: If one accepts what Mr Visscher says he was saying – Mr Bray says he said something different – but accepting what Mr Visscher said Mr Bray was saying, we say it is a fair characterisation that all he is saying is, “I need to have a look at the roster and see what is available. You may be sailing as a second mate”.
KIEFEL J: Was this put in the Commission on this basis that there could be no termination even on his version of events?
MR HATCHER: Yes.
KIEFEL J: But that would be somewhat accepting, would it not, a perception on the part of the employer that he is entitled to continue as chief officer?
MR HATCHER: No, it would not be accepting that. It would accepting the proposition that the company had repudiated his contract in 2001 and he had his remedies in 2001. They do not include reinstatement in 2004.
KIEFEL J: I do not think there is any finding from the Commission about this.
MR HATCHER: If I can take the Commission to Commissioner Redmond’s decision, he deals expressly with this and the evidence of Mr Parmeter. It is in the Full Bench decision at page 397 of the application book, paragraph [12]:
On 22 February 2004, some 6 weeks after these conversations, the appellant sent an email to the respondent in which he said that he was classified as a Chief Officer and that by requiring him to sail as a Mate Grade 2 the respondent had terminated his employment. On 24 February 2004 the respondent replied indicating that the appellant had never been classified as a Chief Officer and was currently classified Mate Grade 2. On 3 March 2004 the appellant was discharged from MV Broadwater at the conclusion of his tour of duty. On 19 March 2004 the appellant filed an application for relief . . .
[13] A meeting took place between the appellant and Mr Parmeter of the respondent on 26 March 2004. There was some inconsistency in the accounts given of the meeting. The Commissioner preferred Mr Parmeter’s version to the appellant’s. He found that Mr Parmeter offered to let the appellant withdraw his resignation, confirmed that he was not a Chief Officer and had only filled that role in an acting capacity, that he would not have to sail as a Mate Grade 2 and, although that might change, the immediate prospect was that he would continue to sail as a Chief Officer on MV Broadwater.
BELL J: Is not the “although that might change” the significant matter in that finding?
MR HATCHER: Well, it had been that way since October 2001. That is the point that the Full Bench make at paragraphs 23 through to 25:
Adopting that approach, and accepting that the appellant’s version of the January 2004 conversations is correct –
and they have said that they have accepted that, notwithstanding Commissioner Redmond’s finding that he preferred the respondent’s evidence –
could it be said that when Mr Bray indicated that the appellant would be required to sail as Second Mate on his next voyage the respondent thereby took a step the probable result of which would be termination of employment or that the appellant had no effective choice but to resign. We do not think it can. The appellant had a number of options. The conversations on 8 and 9 January were only that and no formal indication had been given of the respondent’s position. Earlier changes in status and assignments to vessels appear to have been the subject of written communications. The fact that the appellant waited for six weeks before sending the email of 22 February 2004 indicates that the position was uncertain. In the intervening period no indication had been given to him of a specific vessel, voyage or position once MV Broadwater returned to Australia. In the circumstances the email of 22 February 2004 was pre‑emptive. It indicated an independent intention on the appellant’s part to bring the contract to a close. By independent we mean not initiated by the employer.
It was expressly put by our friends that this was not dealt with by the Full Bench.
[24] Finally it is necessary to deal with the submission that the conversation of 8 and 9 January 2004 themselves constituted a demotion amounting to a termination of employment. This was the basis advanced in the appellant’s letter of 22 February 2004. Section 170CD(1B) of the Act deals with demotion. It reads:
(1B)For the purposes of this Division, termination or termination of employment does not include demotion in employment if:
(a) the demotion does not involve a significant reduction in the remuneration or duties of the demoted employee; and
(b)the demoted employee remains employed with the employer who effected the demotion.”
[25] The terms of s.170CD(1B) would not exclude a demotion of the type alleged by the appellant from the statutory meaning of the expressions termination and termination of employment. As we have earlier indicated, in our view the relevant demotion occurred in September 2001. If we be wrong about that it seems to us that even on the appellant’s version of the January 2004 conversations they do not constitute a demotion. In light of the history of formal correspondence in relation to changes in classification, something more would be required than the conversations referred to. They were at most an indication of future intention on the respondent’s part.
The respondent had been saying from October 2001, “Make grade 3 and make grade 2. You can be required to sail in those capacities. But we have a need for you to act as chief officer.” It was a continuing need to act as chief officer; nothing changed. The only different thing was that he refused to sail on the Samar and that led to a conversation.
GUMMOW J: Yes, the Full Bench reasoning might have been stronger if they had referred to that evidence at 238 as to what precipitated the situation, namely, Mr Gleeson’s client leaving the Samar Spirit.
MR HATCHER: Yes, we accept that, your Honour. But that is the applicant’s evidence.
BELL J: If one goes back to the facts, Commissioner Redmond I think noted that it was Mr Visscher’s account that he had a proper reason for wishing to no longer serve on the Samar.
MR HATCHER: Yes.
BELL J: I cannot quite recollect whether that was put in issue by Teekay, but was that ever concluded. It is just not clear to me. If it be the way the matter proceeded that there was an acceptance that Mr Visscher properly declined to continue to serve on the Samar in light of some incident involving the captain, then what is the significance of that? The issue remains, does it not, that Mr Visscher at all times maintained that his contract with Teekay was as a chief mate from 21 August 2001, and it is simply that for the first time the issue comes to a head on 8 January in the conversation with Mr Bray.
MR HATCHER: With respect, no, your Honour.
BELL J: Well, that is the first time he is threatened with the company not treating him as a chief mate and paying him at that rate, is it not?
MR HATCHER: No. That was his approach, the Commissioner found against him on that. The Commissioner said, “You knew all the time the company’s view was you are graded as a deck officer grade 3, deck officer grade 2”.
BELL J: I think we are at cross‑purposes. The company had maintained that position, consistently with the statement on the payslip, but Mr Visscher equally had maintained his position and the matter only came to a head when, in consequence of the incident involving the Samar, there was the conversation with Mr Bray. But if in fact Mr Visscher was entitled to take the stand he did with respect to the Samar, it is just not clear to me what you get from that incident.
MR HATCHER: Well, there are a few steps to it, your Honour. Firstly, Mr Visscher had not maintained throughout that his contract continued as chief officer. He said, and I have referred to the correspondence, that he had been terminated.
BELL J: You took us to a passage where that was put to him ‑ ‑ ‑
MR HATCHER: The correspondence was dealt with, yes.
GUMMOW J: That is why the Full Bench said he seemed to be blowing hot and cold at paragraph 20 on page 399.
MR HATCHER: Yes.
GUMMOW J: Now, you are going to take us to some material?
MR HATCHER: Can I go to application book 347, third paragraph.
In brief, my view is, in consideration of the manner and extent of my demotion, Teekay Shipping has terminated my employment.
He is still acting as Chief Officer at this time.
BELL J: And he indicates that he looks forward to speaking with them and he suggests they get some legal advice. Where does this go to next?
MR HATCHER: Nothing, nothing, absolutely nothing, your Honour. AB 174, at point 40:
It is foreseeable that your recommendations would be acted on. Your recommendations have been acted on . . . With respect, your recommendations have caused what amounts to an interference with the contractual employment conditions, and relationship, between myself and my employer, and prejudiced my position. Consequently, Teekay Shipping have (constructively) terminated my employment.
HEYDON J: We are not reading, of course, the writings of a lawyer. What actually do you get out of 347 and 174?
MR HATCHER: Well, it reads as if it is written by a lawyer exactly, your Honour.
GUMMOW J: It cites Grassby v The Queen.
MR HATCHER: Yes, that was on the question of bias. Commissioner Raffaelli was dealing with another of Mr Visscher’s disputes at the time and he was inviting Commissioner Raffaelli to disqualify himself.
HEYDON J: Is your submission that he accepted the repudiation on 27 September 2001 and terminated the contract.
MR HATCHER: He elected to terminate that contract and accept the continuing contract as a mate grade 3 acting up in the position of chief officer.
HEYDON J: Well, if he is such a good lawyer, he did not say that. He said that Teekay had terminated his employment, that is, breached his employment.
MR HATCHER: Terminated.
HEYDON J: You know what Lord Justice Asquith said.
MR HATCHER: Yes. If I could then go to application book 295.
GUMMOW J: We do not seem to have the whole of this letter at page 174.
MR HATCHER: I am sorry?
GUMMOW J: Yes, we do. Yes, thank you.
MR HATCHER: This is July 2002:
Dear Tim
Due to the resignation of Stewart Knight, we have pleasure in offering you a permanent promotion to the position of Second Mate Grade 1 effective from 1 July 2002.
This and future promotion is due in part to your efforts on board and results of performance appraisals. Knowledge, qualifications and performance are all factors that contributed to this promotion. Please be advised that your next performance appraisal is due on 1 July 2003.
As we will only have people in responsible positions that can perform their duties to the highest level, this promotion is subject to six months sea time probationary period. Any time served in this rank during the previous two years forms part of your probationary period.
CRENNAN J: Was there any response to that letter?
MR HATCHER: None in the materials. I am sorry, there was. I think Mr Visscher says at some point that he rejected the – it may be in his evidence before the Commission. He says that he rejected the promotion because he did not need it.
CRENNAN J: What, he formally rejected it?
MR HATCHER: I do not know that that word forms part of the evidence, your Honour, but that certainly appears whether it is in correspondence or in the transcript.
GUMMOW J: We had better find it.
MR HATCHER: We will look it up. Can I return then to your Honour Justice Bell’s question. In our respectful submission, when you come to consider the question of whether the termination is at the initiative of the employer, it is does not matter whether he asked to move off the Samar Spirit for a good reason or bad. The point is it is that move that gives rise to the events. It is not, as our friends put it, Teekay deciding that they are going to implement this long held over reduction in grading. It is just a separate event. If Mr Visscher was no longer able to work as a chief officer because he had broken his leg, something would have to be done. He would have to go somewhere.
You have to look at what positions you have got and who you have available. On our friend’s analysis, the difficulties for a company in operating its operations – if it cannot say to a chief officer, “Look, at the moment, because rather than having the usual four off on leave, we have only got two off on leave, we have two too many officers, we are going to require you to sail as a second mate”, if that is a repudiation of contract, it means that they have got to terminate. They have got no option to but to terminate that employee’s employment.
That would be an unusual construction, and it is certainly not to be found in the documents that give effect to the contract of employment. They are to be found at application book 250 where there is the reference at point 50 to the agreement and the award and the award has a provision in it that you will perform any duties you are capable of.
GUMMOW J: Where do we see that?
MR HATCHER: In the award which has been provided to your Honours, clause 9, “EMPLOYEE DUTIES”, reads:
An employee will be required to carry out all duties which are within the employee’s skills, certification, competence, training and applicable legislation.
BELL J: I am sorry, what page is that?
MR HATCHER: It is in the award that, I think, has been provided to your Honours. Clause 9, page 5 of the print I have. It may not be the same print. In the agreement that Mr Visscher accepts when he accepts employment initially as a third mate, duties and responsibilities are dealt with in clause 6 on page 250 of the application book:
As a Third Mate you will be expected to perform such duties which are within your skills, certification, competence and training, and to carry out instructions and directions as the company may, from time to time, reasonably and lawfully give to you. Your specific duties will be assigned to you on onboard the vessel.
Then in clause 7, “Placement on Vessels and Transfers between Vessels” – the third paragraph:
As a company employee, it is a term and condition of employment that you may be transferred between vessels in accordance with the enterprise agreement and company policies. In accordance with the normal processes of enterprise employment, employment is into the company’s fleet and not to an individual ship. The company will allocate employees flexibly within our fleet.
BELL J: I am not quite sure where this is going. Are you saying that under clause 9.1 of the award a person employed by Teekay as a chief mate can be required to carry out the duties of whatever a deck boy is, and paid at that rate?
MR HATCHER: Not paid at that rate, no, your Honour. This is simply a clause that says you can be required to fulfil any duties that you are qualified to perform. So saying to him ‑ ‑ ‑
BELL J: I am just seeking to understand the proposition you are putting. In the conversation with Mr Bray the suggestion was that, consistent with the stance the company had adopted, he was classified or certified as a second mate and the company was going to require him to carry out those duties consistent with the company’s classification of him as a second mate, what one assumes at the pay of a second mate. Is that ‑ ‑ ‑
MR HATCHER: With respect there is nothing in the conversation as recorded by either Mr Visscher or Mr Bray that gives rise to any suggestion that pay would change. Mr Bray says that he had in mind that Mr Visscher was graded as a mate grade 2 and could be asked to perform the duties of a second mate but there is no reason why the company could not have one of the chief officers approach them and say “I am not prepared to work on this vessel any more” and the company say “Well, we do not have available another position as chief, you are going to have to sail as second mate on a vessel until a position comes up”. No reason whatsoever why they could not do that. The contract contemplates it. He would continue to be paid as chief.
BELL J: That is a matter of some significance, is it not?
MR HATCHER: Yes.
CRENNAN J: The duties are different and the duties of the second mate are lesser duties than the chief officer.
MR HATCHER: Yes.
CRENNAN J: You are talking about an acting up situation?
MR HATCHER: No, I am talking essentially about the reverse, your Honour, where you say to a chief officer, “At the moment we have too many chief officers, but we want to keep you in employment so we are going to assign you to this vessel as second officer, continue to pay you as chief officer”.
CRENNAN J: Lesser duties.
MR HATCHER: Lesser duties.
CRENNAN J: I see.
KIEFEL J: If it had been as simple as all of this it hardly seems necessary to have gone into all of the discussion about what position he truly held and what the employer’s view was of it.
MR HATCHER: Quite, but this was the case that was run against us, the case for the employer has at all times been a very simple question, termination at the initiative of the employer.
KIEFEL J: That may be because the employer in the correspondence which followed the discussions in January asserted the very position that you say was not particularly relevant. It asserted that it had the right to deal with him as a second mate.
MR HATCHER: Yes, there is no doubt that our clients ‑ ‑ ‑
KIEFEL J: It was never just as simple as saying “We would like to accommodate you as first mate but, goodness me, we cannot find a position”.
MR HATCHER: No, it was not that simple.
KIEFEL J: No.
GUMMOW J: You were going to say there was no doubt that your client did or did not do something.
MR HATCHER: There was no doubt that our client consistently from late September 2001 acted on the basis that the agreement that had been reached with the AMOU, the resolution of the dispute, was binding on it and that Mr Visscher was graded as a mate grade 2.
CRENNAN J: Or make grade 3 until he was subsequently promoted?
MR HATCHER: Yes, I am sorry, your Honour.
GUMMOW J: But the supplementation of his remuneration was consistent with the binding effect upon the employer of the industrial arrangements, was it?
MR HATCHER: It was. The industrial arrangements allowed them to, in fact, contemplated that there would be acting appointments to enable those employees higher in seniority to get the necessary sea time to take the higher position. You had to have people fill the positions, their statutory positions. So it had to be filled in an acting capacity until those higher in seniority qualified. That, of course, is why when our friend says if you look at the lists people are swapping and changing, they swap and change, if they have not got the qualifications, they are going to stay as a mate grade 3 and lose their seniority going up through the grades. No particular magic to that. The Full Bench expressly found that Mr Visscher had elected at paragraph [21], application book 399:
We think the true construction of events, the one the Commissioner accepted, is that the appellant elected to continue his employment after September 2001 in the full knowledge that the respondent had demoted him. Only in February 2004 did he decide to ”recognise” the demotion and characterise it as a termination of employment. It was submitted on the appellant’s behalf that no loss had arisen following the purported rescission of his promotion to Chief Officer in 2001 because he continued to receive the pay of a Chief Officer. The prospect of a reduction in pay arising from the conversations with Mr Bray on 8 and 9 January 2004 was said to entitle him, the appellant, to “recognise” the demotion as effective, even though he still did not accept it. In our view it suited the appellant’s interests to accept the demotion as effective then rather than at any other time in the preceding two and a half years. He cannot be criticised for that. But we cannot see how those circumstances could justify the conclusion that the appellant’s employment was terminated at the initiative of the employer. Clearly they cannot.
So the Commission has come back, correctly, to the jurisdictional test; was termination at the initiative of the employer, that is, the cessation of employment, him stopping work ultimately in June 2004, well after he filed his application? Was that at the initiative of the employer? Well, he says it is because the employer said, “We regard you as a grade 2 and we can put you on a vessel as a grade 2”. They had been saying that since 2001. The Commission finds as a fact that was not what gave rise to the termination. What gave rise to the termination was Mr Visscher deciding it was time to pull the pins in.
CRENNAN J: Did the Commission decide what had happened in 2001? I thought that was something that Commissioner Redmond did not address and that is dealt with by the Full Court at 15, is it not?
MR HATCHER: They say in [21]:
We think the true construction of events, the one the Commissioner accepted, is that the appellant elected to continue his employment after September 2001 in the full knowledge that the respondent had demoted him.
CRENNAN J: Yes, it is just I am reading it with paragraph [15].
MR HATCHER: Yes, it is hard to put the two together. But the conclusion to paragraph [15] brings us back, with respect, to the fundamental question before the Court:
On appeal it seems to us the critical question is whether the conclusion that there was no termination of employment at the initiative of the employer is affected by material error.
That is what the Commissioner had to ask himself; that is what he asked himself. That is what the Full Bench had to ask themselves and they asked themselves that question. This Court is not here to correct error. This Court is only here to correct an excess or want of jurisdiction where jurisdiction was to decide that question. They did.
BELL J: Without determining the critical question, so Mr Gleeson puts it, which is whether as at the conversation with Mr Bray in January 2004, Mr Visscher was employed by Teekay as a chief mate.
MR HATCHER: They did determine it – he would say wrongly – but they did determine it. When they say he has elected to accept the demotion, they have determined the question of what his position was in 2004, but they then proceed to say “Even if we are wrong about that, nothing that occurred was enough to effect a demotion”. That conversation was not enough to effect a demotion.
BELL J: In paragraph [21] the Full Bench says that. Can you take me to where Commission Redmond makes the finding that the Full Court rely on?
MR HATCHER: Commissioner Redmond’s decision has its difficulties associated, your Honour, but we are dealing with a tribunal that has to deal with these things practically on a daily basis.
HEYDON J: Where is the answer to Justice Bell’s question that you ‑ ‑ ‑
MR HATCHER: As close as we get is paragraph [128] in application book 386:
I am not persuaded that the evidence permits a finding that the respondent intended by its conduct that the relationship conclude nor that there is an imputation of such an intention. Nor do I find that its conduct was such that on any reasonable view it would probably have had that effect.
He is there citing from Full Bench authority on the test that he is to apply.
On the facts, the employer’s intentions were to the contrary. The respondent’s evidence, which I have accepted, demonstrates that its actions were consistent with both a belief and an intention that the employment relationship remained on foot. For these reasons, whilst I accept that the applicant found the effects of the respondent’s conduct onerous, I do not accept that the conduct was such as to place the applicant under some sort of unfair pressure.
The other thing I wished to address was the nature of the relief. Our friend has advanced a suggestion that this Court can send it back to the Commission to enable the Commission to declare the contractual rights of Mr Visscher and to accord him recognition of those rights for some three years.
Nothing in the statute allows the Commission to do that. The Commission can reinstate the employee to a position, or order that he be employed in another not less favourable position. This Court in Blackadder v Ramsey Butchering Services said that what that power is concerned with is the practical situation as it existed at the time of termination, not the contractual position. That was the very point of the case.
If you put Mr Visscher back into the practical situation as it existed at the time of termination, what do you have? You have a situation where our client is saying, “You are a second mate and we can put you on a vessel as a second mate if we have not got a role for you as a chief officer”, and Mr Visscher is saying, “I do not think you can”.
HEYDON J: The point of the rule of law in courts is to quell controversies and resolve them, not simply after some years return to the state of controversy as it stood before.
MR HATCHER: But we are not talking about a court. We are talking about a tribunal that can only exercise the statutory power conferred on it, and this Court has said that that power is to ‑ ‑ ‑
HEYDON J: …..point to the position in which the employee was employed in law.
MR HATCHER: Yes.
HEYDON J: And Mr Gleeson has various arguments as to what that was, you oppose them, but if he prevailed by chance there could be a remedy, could there not, that attached to the order the legal position on which he had succeeded.
MR HATCHER: Well, your Honour, that was the very point in Ramsey. What was put by Ramsey was that all the Commission was ‑ ‑ ‑
GUMMOW J: You had better take us to Ramsey, I think.
MR HATCHER: If it please. It is reported in 221 CLR 539. The case concerned, ironically enough, Commissioner Redmond had reinstated Mr Blackadder in a circumstance where Mr Blackadder had refused to do a particularly onerous task, apparently hot neck boning, and the company had prior to putting him back to work insisted that he undergo a medical examination to satisfy itself of his fitness to perform the full range of duties, and required him to perform the duties of hot neck boning which were within the position in which he was employed, and he was not going to do that.
The Federal Court had ordered that the company effectively specifically perform the order of reinstatement by putting Mr Blackadder back on the job. The Full Federal Court by majority found that what was restored was the legal relationship as it pre‑existed and so whatever rights the company had under the contract it continued to have under the contract.
GUMMOW J: At paragraph 14 of Justice McHugh is probably important, I think, page 544.
MR HATCHER: Yes, your Honour:
To construe the power “to reinstate” as confined to restoring contractual or other legal rights fails to give full effect to the term “reinstate”. To reinstate means to put back in place. In this context, it means that the employment situation, as it existed immediately before the termination, must be restored. It requires restoration of the terms and conditions of the employment in the broadest sense of those terms. It empowers the Commission to do more than restore the contract of employment. So far as practicable, the employee is to be given back his “job” at the same place and with the same duties, remuneration and working conditions as existed before the termination.
HEYDON J: Why is that against Mr Gleeson?
MR HATCHER: If one then goes to your Honour’s judgment together with Justice Callinan at page 566 of the report ‑ ‑ ‑
HEYDON J: Yes, but why is that against Mr Gleeson, as distinct from what Justice Callinan and I may have said? Justice McHugh is dealing with a quite different problem. He is saying you have to, as it were, restore the legal position but you have to do something more as well. The question is, is Mr Gleeson right in saying that he is entitled to have the legal position restored as distinct from a pre‑existing condition of controversy about what it is?
MR HATCHER: The question, your Honour, is, what is the legal position that is being restored? We say the legal position is the actual job that the fellow was doing with all the circumstances in which he was doing it at that time for that moment of reinstatement. It is not a resolution of the controversy of a repudiation of contract three years earlier, an alleged repudiation of contract three years earlier. It is no more than putting him back into that position with whatever rights, liabilities and so forth attached to that position and that relationship.
HEYDON J: Rights? You have to work out which contract was enforced, whether a contract had ended in 2001 or whether it was continuing into 2004.
MR HATCHER: The Commission simply has to satisfy itself that there was a position that was being filled to which he could be reinstated.
HEYDON J: Justice McHugh does not support you. He is against you.
MR HATCHER: May not support, your Honour, In my respectful submission, he is not against us on that. If I can travel to page 566 of the report, the first full sentence:
The Act empowers the Commission to reappoint an employee to the position in which he was employed immediately before his termination, or to another position, and this it did, by reappointing him to work in the chilled boning room. It is not for this Court to anticipate, by making an order in advance, what may follow from that. As Moore J in dissent in the Full Court said:
“That is not to say, however, that the employer would be precluded, thereafter, from lawfully altering the position of the employee by requiring the employee to perform other duties, standing down the employee or even dismissing the employee . . . The order is intended to have the effect earlier described and, to that extent but only to that extent, overrides any contractual or other rights the employer may have.”
That is, it restores the relationship as it existed immediately prior to the interruption. Now, that relationship on the facts – there was a legal controversy between the parties.
GUMMOW J: How much longer do you think you will need, Mr Hatcher?
MR HATCHER: Not terribly much longer, your Honour, but if it is a convenient time, it is convenient to us.
GUMMOW J: I had better ask Mr Gleeson. How long will you need in reply?
MR GLEESON: Ten minutes, your Honour.
GUMMOW J: We will adjourn until 2.00 pm.
AT 12.57 PM LUNCHEON ADJOURNMENT
UPON RESUMING AT 2.01 PM:
GUMMOW J: Yes, Mr Hatcher.
MR HATCHER: Thank you, your Honour. Your Honour Justice Crennan asked me about Mr Visscher’s promotion to mate, grade 2. Could I ask the Court to turn to application book page 325. The Court there sees that Mr Visscher gives evidence at paragraph 17, point 50 on the page:
With regard paragraph 4. Mr Parmeter states that I was promoted to Second Mate, Grade 1. Other parts of the statements refer to me as being, or being graded as, a Second Mate. With regard to that I say the following:
a)On about 24 July, 2003 I had a discussion with Mr. Pat Condon, Acting Marine Operations Manager. We were standing on the deck of the tanker Samar Spirit, atop the port side accommodation ladder waiting for a launch . . . He told me that when I got home I would find a letter he had written, offering me a promotion to Second Mate. I asked him what would be the result of not accepting the promotion. He replied that if I did not accept I would be relegated to the bottom of the Third Mates grading list. I told Mr. Condon that I would not accept the offer and that I had been promoted to Chief Officer. When I arrived home later that day I saw the letter of offer in my mail.
b)The letter referred to my efforts on board and performance appraisals. My efforts on board were exclusively confined to those of Chief Officer. With regard to myself, there are no performance appraisals of the type referred to in the letter.
c)Whilst employed by the Respondent it had not advised me about any promotion or appointment to Second Mate.
Then at 350 we see that correspondence:
Dear Tim
Due to the resignation of Stewart Knight, we have pleasure in offering you a permanent promotion to the position of Second Mate Grade 1 effective from 1 July 2002.
This and future promotion is due in part to your efforts on board and –
so forth.
CRENNAN J: I think I was asking you whether there was a written response to the offer of the permanent promotion.
MR HATCHER: No written response, your Honour.
GUMMOW J: Mr Hatcher, you have mentioned that there seemed to be some problems with the Commissioner’s decision. Whilst the Full Bench did deal with subsection (1B) and demotion in the last two paragraphs of their reasons, I cannot find any treatment of the demotion provision in the Commissioner’s reasons. Is that right?
MR HATCHER: No it is not, your Honour.
GUMMOW J: Does he deal with the subsection?
MR HATCHER: He does not deal with the subsection, no.
GUMMOW J: It raises the question as to whether it has to be done again; in other words, prohibition and mandamus.
MR HATCHER: Your Honour, all he is required to determine as the jurisdictional question whether termination was at the initiative of the employer. He has expressly identified that as the question he is determining.
GUMMOW J: That statutory language does not stand by itself. It is supplemented by subsection (1B). You have to read the whole together, do you not?
MR HATCHER: Subsection (1B) provides a definition of what will constitute termination at the initiative of the employer for the context of that, but termination at the initiative of the employer is itself a definitional term. He does not have to express the ‑ ‑ ‑
GUMMOW J: Did not the materials before the Commissioner bespeak a dispute as to demotion?
MR HATCHER: Yes, and he deals with that.
GUMMOW J: In the statutory sense?
MR HATCHER: No, they did not bespeak a demotion in the statutory sense.
GUMMOW J: Why then was the Full Bench dealing with it?
MR HATCHER: The Full Bench dealt with it because they turned their minds to it themselves. It was not an issue that had been formulated by Mr Visscher that his was a demotion that fell within this category, but the good Commissioner did recite in some detail all that he had before him. He makes from paragraph [100] on page 379 what he says are findings of fact:
From the evidence before me I am prepared to accept on 21 August 2001 the applicant was offered a promotion . . . formally accepted the offer . . . A dispute then occurred . . . That dispute was listed and heard.
And he deals with the Commissioner’s recommendations. Paragraph [102]:
The applicant was notified by the respondent on 20 September 2001 that the company intended to rescind his position . . . On 26 September 2001 the applicant sent a facsimile to the respondent advising that he did not accept that his promotion had been rescinded.
He sent the correspondence to his union which is there extracted. At [105]:
the applicant was shown a grading system of the respondent. The grading system which was presented ‑ ‑ ‑
HEYDON J: No, we have had that read to us twice already I think.
MR HATCHER: I’m sorry, [105] and [106].
GUMMOW J: Then under the heading “Findings” there is a detailed discussion of some case law.
MR HATCHER: But he starts with this:
[107] Whether the termination of employment was at the initiative of the employer is ultimately a matter of fact to be determined upon the individual circumstances of each case. Unless that fact is established, the Commission has no jurisdiction . . .
[109] The correct question to ask in this matter is not whether the employer repudiated the contract of employment but rather, whether or not the termination was at the initiative of the employer –
At [118], page 383:
On the evidence . . . I find that the circumstances before me do not give rise to conduct occasioning a repudiatory breach of the employment contract.
GUMMOW J: The problem is this word “termination” is carried over from its contract language holus bolus, and that is not what happens because of (1B).
MR HATCHER: Quite, your Honour, the statue envisages a relationship rather than a contract and it envisages that ongoing relationship separate from the contract coming to an end. It is to deal with situations – and this is pointed out in Brackenridge – of multiple terminations, retrenchment situations. It does not attend upon the contract. This Court in Amcor considered where there was a clear termination of the contract of employment transferred from one employer to another – without consent it might be said – whether that was termination for the purposes of the Act and it was not, or for the purposes in that case of an agreement.
GUMMOW J: What is the citation of Amcor?
MR HATCHER: Can we perhaps provide a note on that. It is not on our list.
GUMMOW J: 222 CLR 241.
MR HATCHER: Thank you, your Honour. Commissioner Redmond continues on page 383, paragraph [119]:
Consequentially, I find that the respondent’s actions did not repudiate ‑ ‑ ‑
HEYDON J: We have had that read, too.
MR HATCHER: But he proceeds in [120] to say:
it is necessary to consider whether on the Mozahab test the resignation of the applicant could properly be characterised as a termination at the initiative of the employer.
He continually comes back to the question, was it termination at the initiative of the employer? Large slabs - as your Honour Justice Gummow says - of other cases, but then at [126]:
I intend to apply the principles . . . to determine whether the resignation of Mr Visscher constitutes a termination at the initiative of the employer . . .
[128] I am not persuaded that the evidence permits a finding that the respondent intended by its conduct ‑ ‑ ‑
HEYDON J: You have read that before.
MR HATCHER: Thank you, your Honour. The submission we put is the Commissioner attended upon the jurisdictional task before him. That is what he is required to do. The evidence of Mr Bray that I earlier referred to, remembering that Commissioner Redmond said he preferred the evidence of the respondent, but was not particular in terms of which evidence he preferred, the Full Bench were in those circumstances not willing to assume that Mr Bray had been preferred over Mr Visscher, and accordingly accepted Mr Visscher’s version of the events for the purposes of their consideration, but Mr Bray’s recounting of events is found at application book 107 to 108 and 109 to 110. At about 14:
Now, did you ask him to join the Broadwater as a direction you’d received, or was a decision that you took, or how did it come about? ‑ ‑ ‑I was asked by I suppose Mr Craig in the office, who showed me an email that Mr Visscher had sent him saying he didn’t wish to sail on the Samar Spirit. So when the opportunity or position arose on the Broadwater I was asked to contact him to see if he’d be interested in sailing there.
He has no notes and so forth. At 30:
Are there any documents of which you’re aware which required you to tell Mr Visscher that he was to be sailing as a chief officer ‑ ‑ ‑
GUMMOW J: We can read all these things, you know, Mr Hatcher. We do not have to have them read out to us, we are not disabled in any way.
MR HATCHER: Thank you, your Honour. From there through to 10 on the following page where it is put to Mr Bray Mr Visscher’s account of events and Mr Bray says he does not recall those words. From 109, 20, it is again put to him that his recollection is mistaken and Mr Bray says, “If I had said that, it would not be surprising because he was graded as a second mate”, but then he denies saying that he and Mr Visscher would be sailing as a second mate. He says at the top of page 110, “It didn’t happen”.
At no time did I advise the applicant that he would be required to return to sea as a Second Mate. My statement in paragraph 7 was made in reply to a question from the applicant as to what would happen if there were no Chief Officer vacancies. In doing this, I had regard to the Teekay’s existing Grading List that identified the applicant as being graded Second Mate, notwithstanding the applicant had been sailing up as Acting Chief Officer.
Can I deal then with the question of the agreement. Our written submissions deal with that matter. In our respectful submission, the agreement is binding. It sets the list of positions. It says what seniority Mr Visscher has and it makes it clear that his seniority is as a mate grade 3. It is the subject of agreement between the union acting on behalf of its members, including Mr Visscher and our client.
GUMMOW J: What happens if a situation arises where your client is observing the letter, but not the spirit of the agreement, the industrial agreement?
MR HATCHER: That has not been suggested in any of the proceedings below, your Honour. If our client is in breach of an industrial agreement, well, they are in breach of an industrial agreement, but that has never been suggested. The evidence was that Mr Visscher had been sailing as chief officer from April 2004, before he received a permanent appointment as mate grade 3. The evidence was there were other mates grade 3 and grade 2 sailing as chief officer on vessels because of this dispute over gradings.
The evidence was that Mr Visscher would continue sailing as a chief officer for the foreseeable future. That is the passage from the Full Bench decision recording Mr Parmeter’s evidence which was accepted. There is no suggestion that it was involved in some sham or charade in utilising Mr Visscher’s services as chief officer. It needed him to sail as chief officer.
GUMMOW J: Of course it needed him.
MR HATCHER: It wished to continue sailing him as a chief officer. It wished to continue its existing employment relationship with him. It did not wish to terminate the employment relationship. As to the interpretation of the agreement, in our respectful submission, your Honours are entitled to and would have regard to the background in which the agreement was arrived at. It is plain on the materials that the background was there was a dispute as to gradings. There was, in particular, a dispute as to the grading of Mr Visscher and one other person and the agreement was arrived at after Commissioner Raffaelli’s recommendation was implemented. So much can be seen at application book page 296, where Mr Visscher is informed on 26 June 2003 that:
Finally, Teekay has reached an agreed position with the AMOU regarding the Mates grading list.
It talks of the “air of uncertainty” and so forth and the agreement:
that no permanent changes could be effected during the 8 months –
of the negotiation. All that is consistent with the agreement reflecting a situation where Mr Visscher was effectively demoted. It records his position and it is given the force of the statute. Again, in Commissioner Redmond’s decision at 377, paragraph [92] and he is here it should be said reciting again the respondent’s submissions, but it is expressly put:
The relief sought by the applicant is contrary to the terms of the 2001 Agreement, as it seeks to allow the applicant to receive appointment to the position of Chief Officer other than by way of clause 23 “Career Progression” –
and authority is given as to why that cannot be the position. As to his Honour Justice Buchanan’s analysis of the law of repudiation, we concede that this is a difficult case where an employee is told that he is no longer in the position. The employer will not continue to employ him in that position, but will employ him in another lesser position, and as a matter of practicality the employee suffers no detriment. That is the difficult contractual situation to deal with. It would not be so difficult if the employer had said, “I will not continue your employment as a chief officer. I will employ you as a cook”, completely different positions. If the employee then continues as a cook, there is no doubt that he has made an election.
Here we do not have that factual situation, but we do have factual findings at first instance and on appeal that he did elect to continue in the demoted position. They seem to be available. We have the complicating factor of the statute where you have an agreement given force by the statute that recognises the demotion. All of this, in our respectful submission, makes it an entirely inappropriate case for special leave. It is not the appropriate vehicle to consider the complex questions that our friends would wish to advance as to the difference between election and automatic operation of repudiation of the contract of employment. It is certainly not an appropriate vehicle to consider whether the Commission has a power essentially to grant declaratory relief in relation to a contract of employment allegedly terminated in September 2001, that being the effect of the relief that is sought by our friends.
GUMMOW J: Can we just go back to page 377 for a minute, paragraph [92] of the Commissioner’s reasons. That quote there, “seeks reinstatement”, where does that come from? It does not seem to be in the actual application. Maybe I am wrong.
MR HATCHER: I cannot immediately assist your Honour.
GUMMOW J: Page 4 just says, “What are you seeking?” “Reinstatement”.
MR HATCHER: Your Honour, I believe it comes from the cross‑examination. Mr Visscher was certainly cross‑examined to the effect that he did not really want to go back to the position as it was in January 2004. What he wanted was the Commission to find that he had always been chief officer since September 2001. That may be where the Commissioner has got that passage from.
GUMMOW J: I think your junior has found it.
MR HATCHER: I think he is thinking again, your Honour.
GUMMOW J: It could be quite important. If you are right in relying on page 377, paragraph [92], is that not an answer to the application itself, namely, that there is an attempt to rely on the Act to achieve something which the Act does not permit.
MR HATCHER: Yes.
GUMMOW J: It does not permit it because of the force given to the certified agreement.
MR HATCHER: Yes. That has rather been the thrust of our written submissions and our submissions on leave.
GUMMOW J: The trouble for the applicant being that once outside the common law, in the statute, they have to take the good with the bad, as it were.
MR HATCHER: Quite. Of course, the applicant makes it clear in his address today that the order he seeks is reinstatement to the position of chief officer effective September 2001. Anything less than that is of no utility to him.
GUMMOW J: Or to put it another way, the Commission would not be deciding the dispute according to law if it gave that remedy.
MR HATCHER: Other than that, yes.
GUMMOW J: We had better hear what Mr Gleeson says about that.
MR HATCHER: May it please the Court. I am sorry. My learned junior has found something that is not exactly it but is pretty close. That is at application book page 61 at about line 25.
Now, what you’re seeking reinstatement to is the position that you were appointed to briefly in September 2001, correct?‑‑‑Yes.
GUMMOW J: What is the section that gives the certified agreement the force of law? Can you just turn that up?
MR HATCHER: There is a series of provisions that make it enforceable as if it were an award. It can be interpreted by the Federal Court. I think that is.....section 178 are the enforcement provisions. My learned friend took the Court to that earlier. It cannot be varied other than by a very specific procedure. That is be found in Division 7 of Part VIB. Division 5 deals with its effect and Division 6 deals with who is bound. There is no doubt that the applicant was bound, the respondent was bound and the union was bound. May it please the Court.
GUMMOW J: Thank you, Mr Hatcher. Yes, Mr Gleeson. Do you have reformulated relief?
MR GLEESON: Yes, your Honour.
GUMMOW J: Has your opponent seen this?
MR GLEESON: Yes.
GUMMOW J: Have you any objection to the receipt of this?
MR HATCHER: We have a minor grievance, but we raised it at the special leave application and they deliberately did not amend. But I do not think we will trouble the Court too long about that.
MR GLEESON: Your Honour, if the application were otherwise successful, we would seek to bring in the formal notice of appeal, including those paragraphs which would see the matter returned for proper hearing in the commission on an extant application.
GUMMOW J: Yes, well, you have leave to file in Court these amended orders.
MR GLEESON: May it please the Court.
GUMMOW J: What then is the answer to…..to determine it in accordance with law requires giving full effect to a certified agreement.
MR GLEESON: It does but the certified agreement does not stand in the way of the claim which says, “I held the position from the point in time prior to and therefore did not need promotion under that agreement”. What the agreement does is seek to regulate the manner in which promotions might occur during a three‑year period. Mr Visscher’s claim was that he held the position.
GUMMOW J: What is the answer to paragraph [92] on page 377?
MR GLEESON: So paragraph [92], which I will deal with - as your Honours appreciate, it is a submission not a finding of the Commissioner, it is in the paragraph.
GUMMOW J: Yes.
MR GLEESON: Yes, so the answer is that the relief would not be contrary to the terms of the agreement for the reasons I mentioned in‑chief, including that the relevant clause, clause 23, operates to create a set of criteria, one of which only provides guidance in relation to people seeking to progress up the rank. He already is in the rank as a chief officer. He does not need to avail himself of clause 3 to obtain a promotion, therefore there is no inconsistency between the relief he seeks and what is provided for in the agreement. That is the first answer, your Honour. That includes the matters of construction that I put this morning as to the purpose of ‑ ‑ ‑
GUMMOW J: Where can we find clause 23?
MR GLEESON: Yes, on pages 192 to 193. The purpose of 23.1.1 is to specify a range of criteria to be had regard to when positions are filled during the life of this agreement. In other words, to control what would otherwise be the employer’s exercise of discretion. In the case of Mr Visscher, he already ‑ ‑ ‑
GUMMOW J: But he is shown in the agreement ‑ ‑ ‑
MR GLEESON: He already held his position so that he did not need to seek to be elevated to a new position.
GUMMOW J: He is shown in the agreement as third officer, is that not right?
MR GLEESON: He is shown in the document ‑ ‑ ‑
GUMMOW J: Page 210.
MR GLEESON: ‑ ‑ ‑ at 210 which, as I have indicated, (a) is a document that changes over time, (b) is a document which has as its relevance 23.4, to provide a basis – not a guarantee nor an absolute fetter but a basis – a ground upon which a seniority table which could be taken into account for future promotions.
GUMMOW J: Exactly, exactly. Just a minute. So we start off at page 210, item 36, third officer, right. If that is to change and you say – and one can see the force of it – 23.4 has a fluidity with it, it is the basis of future promotions, future promotions means career progression under the earlier part of 23. Was there a career progression according to 23 in the events on which you rely?
MR GLEESON: No, because prior to this agreement coming into force in 2002 he had already reached his position.
GUMMOW J: The agreement is false. The agreement contains a falsehood which binds him.
MR GLEESON: The agreement in a document which is fluid, which changes over the life of the agreement ‑ ‑ ‑
GUMMOW J: No, no, no, Mr Gleeson, it changes later. You are talking about changing before. Now, before this agreement came into force, what was his position?
MR GLEESON: His position was chief officer.
GUMMOW J: That is right. That is not what the agreement says.
MR GLEESON: The agreement is inaccurate to the extent appendix A puts him in a different category.
KIEFEL J: Yes, I was going to ask you that. You say that it contains a factual error which does not otherwise affect the operation of the agreement?
MR GLEESON: No.
CRENNAN J: Can I ask you about a related matter. Page 249 you have the original letter of offer which makes a reference to the award and certified agreements and at clause 15, to be found on page 251, there is a reference there to “Termination and Retirement” and again a reference to “the Enterprise Agreement”, I suppose the extant enterprise agreement. I wanted to ask you how that fits with your argument that there is no inconsistency between the relief he seeks and what is in the agreement, bearing in mind that this is part of the original letter of offer in relation to a third mate’s job which he accepts and this is purporting to set out the terms and conditions of employment.
MR GLEESON: The enterprise agreement referred to in clause 15 on page 251 is the earlier enterprise agreement on page 113 which has nothing in it that is erected as an obstacle. So as part of his contract it is ‑ ‑ ‑
CRENNAN J: That earlier enterprise agreement.
MR GLEESON: That is his earlier enterprise agreement. It erected no obstacle. He was validly promoted and achieved his position in September 2001. Then a year later a document comes into force which, yes, we have to accept on our argument, contains, for a different purpose, an inaccuracy.
GUMMOW J: If a certified agreement is inaccurate but it is certified and has the force the statute gives it, what remedy is there? There is a remedy to rectify the agreement, is there not? I would be very surprised if there was not.
MR GLEESON: Yes.
GUMMOW J: That was it. Was that ever availed of? If it was not, I cannot see how you can now say it is just a matter of fact because at the moment it has this force of law. It is the way the system works in this country.
MR GLEESON: Yes. I accept that the underlying premise of what your Honour is putting but I am seeking to indicate, firstly, that although it is binding and although it has that superior force, what it actually says, although erroneous, is not inconsistent with the legal premise of his claim for reinstatement because, as I have said, he held the position, he was not seeking to be promoted, he did not need to invoke clause 23. That is the first matter.
The second matter is, with respect, your Honour’s question is one I have considered, why was there not some attempt to rectify that document? In that context it is relevant to observe, as I did, that the evidence that Mr Visscher gave to the Commissioner at page 66 is evidence which, if accepted, would indicate there was at least a ground to rectify the agreement and possibly a more fundamental ground that it had not been the subject of a valid majority of employees who were being told what was in it.
CRENNAN J: Or that they had not been given notice.
MR GLEESON: They have not been given notice, they could not vote. If they did not vote, there was nothing for the Commissioner to certify. That is why I have said that what Mr Hatcher has relied upon is a submission and given that the Commission did not make any decision on any question based on the agreement – in effect it was raised in a particular fashion and never the subject of a decision – we have an extant record where on the face of it this agreement most likely was grossly invalid because even if it were taken literally, expropriated property contrary to the terms of the statute, let alone when there was a 51(xxxi) problem.
In those circumstances we would ask your Honours to find there is certainly no lack of utility in having the matter remitted and, indeed, the better view, the one we urge is that he can be reinstated to a position which existed prior to an agreement. If that requires him to seek to rectify a schedule, that would be a matter he would have to seek to raise either in the proceedings or through appropriate collateral proceedings.
CRENNAN J: This has not been raised earlier, has it, that the certified agreement was invalid?
MR GLEESON: The answer to that is that is correct, your Honour. What we identified in our submissions was that if there was an error that that was something which was not material because it did not affect his existing position and we raised in the submissions - but not earlier - that that is something that could be rectified. Upon a review of the statutory requirements for a valid agreement and close attention to the need for a valid majority of informed people, I thought it necessary to refer to page 66.
CRENNAN J: That does not take you all the way home, I suppose. It is one person’s recollection.
MR GLEESON: It does not, of course. All it simply indicates is that where the basis for the declining of jurisdiction has not to date squarely been this agreement, and where we have a solid argument to put that it is not an obstacle, it is not an appropriate discretionary reason to refuse relief.
MR HATCHER: Just while my friend is looking for that, if I can indicate - your Honour Justice Gummow asked about rectification of the certified agreement, there is no express power for the Court or anybody to rectify. Section 170MD allows the Commission to rectify subsection (6):
for the purpose of removing ambiguity or uncertainty ‑ ‑ ‑
GUMMOW J: Yes, that is what I had in mind. Yes, Mr Gleeson.
MR GLEESON: Your Honours, the other matters in reply were these. If I could just in bullet point form, firstly, a submission was put that the Commission found Mr Visscher accepted the repudiation in 2001 bringing the old contract to an end with a new one coming into force. We submit that that cannot be seen in the reasons of the Commissioner of the Full Bench and Justice Buchanan at paragraph 41 correctly ruled that there was no acceptance.
Secondly, an argument was put in the alternative in reliance upon paragraph [25] of the Full Bench’s reasoning that the conduct was not such as to found a termination at the initiative of the employer because, in effect, Mr Visscher overreacted or acted too soon. There seemed to be two elements to that. One is he should have waited until they actually directed him to serve as second mate; the second, a more stark proposition was that the employer had the duty to force any work on him of any menial level or any lower level, as long as they kept paying him.
As to the first, we submit that the events were sufficient to evidence a real intent by the employer to direct him to serve at lower duty and lower pay which satisfied the statutory criterion. As to the second, we submit that under the agreement and award, for instance, page 250, an employee cannot legitimately refuse to do things within the scope of the job but that cannot mean the employee can be directed to perform a different and lower job.
Your Honours might also note on page 250 that the employment is to the fleet and not to a particular ship. The request of Mr Visscher to leave the Samar Spirit after two years was not found to be in any way improper conduct by the employee, perhaps very understandable. To answer Mr Hatcher’s proposition, if an employer employs people as chief officers and eventually says, “I don’t have enough ships” the employer cannot in law simply say, “I will direct you all to work at some lower level, as it suits my business.”
Finally, a proposition was put, based on Blackadder, that what we were seeking was too much. We submit that consistent with Blackadder an order that he be reinstated to his position as chief officer with the – what is entailed in that would meet both the contract and the factual relationship and nothing in that would be inconsistent with the approach in Blackadder.
GUMMOW J: What is the remedy section again?
MR GLEESON: Section 170CH and he seeks both reinstatement under (3) and this would be a case where an order under (4), maintaining continuity, would be highly apposite. The effect of the continuity order of course, would be to quell ‑ ‑ ‑
GUMMOW J: But the phrase “the position in which the employee was employed” ‑ ‑ ‑
MR GLEESON: Is a chief officer in the fleet, which I why I referred to page 250, not chief officer on a ship, He is employed with the fleet and he would be employed as a chief officer with the duties and the pay ‑ ‑ ‑
GUMMOW J: That is not what I am asking you; “the position in which the employee was employed immediately before the termination.” That expression has to take its content from the structure which the Act itself creates, does it not, including the certified agreement?
MR GLEESON: Yes.
GUMMOW J: It does not meant the position in which he was employed on his or someone else’s view of the common law. It has to yield to the position in which he was employed in accordance with the certified agreement, does it not? Otherwise the Act is turning on itself.
MR GLEESON: If we are correct, that the binding force of the certified agreement does not, through a schedule there for a different purpose, serve to create a different position to that which the parties have contractually agreed to, then there is no difficulty. It comes back to a little of what I put to your Honours this morning about the proper construction of the agreement having regard to its underpinning in section 170LI; is it there really to deal with those matters properly pertaining to the relationship between the employer and all persons?
In that context one can understand clause 23 as we have put it, namely, setting a range of criteria to be taken into account when the employer makes future decisions affecting different people, seniority being one of the criterion or, as we would put, your Honours, it is beyond 170LI for one of these agreements, which comes into force by majority will after full information, to extinguish existing contractual entitlements as to position and replace them with inconsistent and lower ones.
Now, your Honours, at that point we are relying not just on the construction of clause 23 and the whole agreement but on what it could properly do having regard to section 170LI. We would suggest that one should be slow before construing this statute as permitting agreements whereby the majority extinguish the contractual position of a minority. We submit it is not the purpose of Division 2 and it is a position one would be very slow before one reached. If one were to argue that that is what LI permitted, then at that point in the argument one would have to give consideration to section 51(xxxi). May it please your Honours.
GUMMOW J: The Court will consider its decision in this matter and we will adjourn until 10.15 am on Tuesday, 26 May 2009.
AT 2.45 PM THE MATTER WAS ADJOURNED
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